HomeMy WebLinkAbout4805 Repealing Ordinance No. 2021-4580 - Supplemental Economic & Tourism Development Incentive ProgramOrdinance No. 2024-4805
An ordinance of the City of Sanford, Florida repealing Ordinance
Number 2021-4580 which implemented an award under the
provisions of Part II, Chapter 2 — Administration, Article V. -
Economic Development, Division 3. Supplemental Economic Or
Tourism Development Program of the Code of Ordinances of the City
of Sanford (City Code); further repealing and rescinding any
implementing agreements; providing for legislative findings and
intent; providing for implementing administrative actions; providing
for a savings provision; providing for conflicts; providing for
severability; providing for codification and the correction of
scrivener's errors and providing for an effective date.
Be it enacted by the People of the City of Sanford:
Section 1. Legislative Findings And Intent.
(a). The City Commission of the City of Sanford hereby adopts and
incorporates into this Ordinance the provisions of the City Commission agenda
memorandum relating to the provisions of this Ordinance and its enactment by the City
Commission.
(b). This Ordinance is enacted pursuant to the home rule powers of the City of
Sanford as set forth at Article VIII, Section 2, of the Constitution of the State of Florida;
Chapter 166, Florida Statutes, and other applicable controlling law; and is consistent
with the provisions of Section 1.4 of the Seminole County Home Rule Charter pertaining
to that document's relation to municipal ordinances, which provides that "[e]xcept as
otherwise provided by this Charter, municipal ordinances shall prevail over County
ordinances to the extent of any conflict."
(c). The City Commission of the City of Sanford has deemed approval of this
Ordinance to be in the best interest of the residents and citizens of the City of Sanford
and to further the public health, safety and welfare.
(d). The City Commission of the City of Sanford has complied with all
procedural and substantive requirements of controlling law in enacting this Ordinance.
(e). Section 2-381 of the City Code, part of the City Code which provides for
awards under the Supplemental Economic Or Tourism Development Program, requires
that a business granted a rebate must inform the City Commission in writing within 10
days as to any changes in ownership of the business granted a rebate and it is
prohibited and unlawful to fail to do so. Further, failure of the business granted a rebate
award to notify the City Commission of any such changes in ownership is cause for
revocation of the ordinance granting the rebate, at the City Commission's discretion.
Section 2-382 of the City Code provides that a should a business granted an award fail
to comply with any requirement of the City Code, the City Commission may, upon 30
days' written notice to the respective business, adopt an ordinance revoking the rebate
or take such other action with respect to the rebate as it deems appropriate. The City
Commission, has provided more than due and appropriate notice as required by the
City Code.
(f). The City Commission of the City of Sanford desires to repeal Ordinance
Number 2021-4580.
Section 2. Repealer; Ordinance Number 2021-4580; Supplemental
Economic Or Tourism Development Award.
(a). Ordinance Number 2021-4580 is hereby repealed.
(b). Any and all agreements implementing the provisions of Ordinance
Number 2021-4580 are hereby repealed and rescinded.
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Section 3. Implementing Administrative Actions.
The City Manager, or designee, is hereby authorized and directed to implement
the provisions of this Ordinance and to take any and all necessary administrative
actions to bring into effect the provisions of this Ordinance.
Section 4. Savings.
The prior actions of the City of Sanford relating are hereby ratified and affirmed
with regard to matters consistent with the action taken herein.
Section 5. Severability.
If any section or portion of a section of this Ordinance proves to be invalid,
unlawful or unconstitutional, it shall not be held to impair the validity, force or effect of
any other section or part of this Ordinance.
Section 6. Conflicts.
All ordinances or parts of ordinances in conflict with this Ordinance are hereby
repealed.
Section 7. Non -Codification; Scrivener's Errors.
(a). The provisions of this Ordinance shall not be codified.
(b). Typographical errors and other matters of a similar nature that do not
affect the intent of this Ordinance, as determined by the City Clerk and City Attorney,
may be corrected with the authorization of the City Manager, or designee, without the
need for a public hearing.
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Section 8. Effective Date.
This ordinance shall become effective and be enacted immediately upon its
passage and adoption; provided, however, that the rights granted in Ordinance Number
2021-4580 shall extend only until September 30, 2024, and shall terminate and be of no
further force or effect as of that date.
Attest.,
Passed and adopted this 12th day of October, 2024.
City Commission0f the City of
Sanford, Florida /
Traci Houchin, MMC, FCRM ! We
City Clerk Mayor
For use and reliance of the Sanford
City Commission only. Approved as to
form and legality.
Y�m
illiam L. Colbert, City Attorney
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Item No. / -A
CITY COMMISSION MEMORANDUM 24.293
OCTOBER 14, 2024 AGENDA
TO: Honorable Mayor and Members of the City Commission
PREPARED BY: Brady Lessard, Economic Development Director
and I' --
Lonnie
Lonnie N. Groot, Assistant City Attorney
SUBMITTED BY: Norton N. Bonaparte, Jr., ICMA-CM, Pf
SUBJECT: Supplemental Economic Or Touris7&eve
Ordinance No. 2024-4805; Repealing Ordi
(Supplemented From Prior Memorandums
Review)
STRATEGIC PRIORITIES: /
❑ Unify Downtown & the Waterfront
® Promote the City's Distinct Culture
❑ Update Regulatory Framework
® Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
rit Incentive Program;
No. 2021-4580;
t Background And Legal
Adoption of Ordinance No. 2024-4805, repealing Ordinance No. 2021-4580 is requested.
FiSCALISTAFFING STATEMENT:
This matter related to the provisions of the "City of Sanford Supplemental Economic or Tourism
Development Incentive Program Ordinance" which was codified as Sections 2-373 through 2-385
of the City Code within Part II, Chapter 2 – Administration, Article V. - Economic Development,
Division 3. Supplemental Economic Or Tourism Development Program of the City Code. Since
the award under that Program, which is the subject of this agenda item, the awardee has been paid
a substantial sum the total of which can be provided to the City Commission. The successor to the
awardee would continue to receive an amount on a per year basis for the life of the agreement
implementing the grant that was awarded unless Ordinance No. 2021-4580 (the Ordinance which
awarded the grant) is repealed.
BACKGROUND AND LEGAL REVIEW (COMBINED FOR THE PURPOSES OF THIS
AGENDA ITEM):
In 2019, the City Commission enacted the "Supplemental Economic or Tourism Development
Incentive Program Ordinance" (Ordinance No. 2019-4526). That Ordinance was codified in
Chapter 2, Division 3 of the City Code and was entitled "Supplemental Economic Or Tourism
Development Program". The City's Supplemental Economic or Tourism Development Incentive
Program provided that the City Commission, at its discretion and on a case-by-case basis, could
enter into an incentive agreement with a person, firm or corporation providing for incentives in
order to encourage and support the development of real property within the City. Each incentive
agreement was subject to approval by the City Commission by means of the enactment of an
ordinance. This was a program of legislative grace and discretion that was put into place not as a
true vested entitlement for property owners to implement (such as with regard to land use matters
arising from the City's Land Development Regulations), but as an opportunity to be awarded funds
based upon ad valorem tax revenues collected, subject to the conditions and restrictions imposed
by the City. The funds could be awarded to applicants if the public interest was benefitted and the
awardee adhered to the requirements and conditions of the award and the implementing agreement.
In 2021, DK Sanford, LLC a Florida limited liability company, applied for an incentive award
under the provisions of the City's Supplemental Economic Or Tourism Development Program.
Debartolo Development, LLC, of Tampa, was the sole manager of the entity at the time. Edward
M. Kobel, also of Tampa, was the sole manager and member of that entity. Transit Properties LLC
was the owner of the property that was the subject of the application. The sole manager of the
property owner was Kevin M. Wydra. There were various organizational structures and interests
relative to the applicant presented by the applicant.
On July 15, 2024, Brady Lessard, the City's Economic Development Director, issued a notice
letter to the following person and entities:
Mr. James D. Palermo
15436 North Florida Avenue
Suite 200
Tampa, Florida 33613
DK Sanford, LLC
3820 Northdale Boulevard
Suite 100B
Tampa, Florida 33624
Transit Properties LLC
624 Long Lake Drive
Oviedo, Florida 32765
Railside Loop Owner LLC
11 East 44th Street
Suite. 503
New York, New York 10017
The notice letter advised the above of the fact that Ordinance No. 2024-4805, now being considered
by the City Commission for enactment, would be considered as well as the date and time of the
hearing of the City Commission. Broad notice was provided to all potentially interested entities.
Further, Mr. Lessard stated as follows:
You are further advised that Section 2-381 of the City Code
relates to continuing performance under the tax rebate program and
states as follows:
(a) Change in ownership. The business granted a rebate
shall inform the City Commission in writing within ten
days as to any changes in ownership of the business granted
a rebate and it is prohibited and unlawful to fail to do so.
Moreover, the transferee business shall continue to comply
with all rebate requirements and shall assume in writing all
of the obligations of the transferor business provided for in
the agreement required by this division. Failure of the
business granted a rebate to notify the City Commission of
any such changes in ownership is cause for revocation of
the ordinance granting the rebate, at the City Commission's
discretion.
(b) Annual filings. The ability to receive a rebate for the
period granted shall be conditioned upon the applicant's
ability to maintain the development giving rise to the award
of the rebate throughout the entire period. The applicant
shall be required to submit an annual renewal statement
and an annual report to the City Manager, or designee, on
or before March 1 of each year for which the rebate was
granted. The annual renewal statement shall certify that the
information provided in the original application has not
changed. The annual report shall provide a report on the
status of the business, evidencing satisfaction of the
business maintenance and continued performance
conditions set forth in the application. The report shall be
prepared in substantially the form approved by the City
Manager, or designee, and shall contain such information
as the City Manager, or designee, may reasonably deem
necessary for the purpose of determining continuing
performance by the business of the conditions provided for
in this division, the ordinance specifically granting the
business an (sic) rebate and the representations made in the
application.
As you know, the City was not notified of the change in property
ownership relating to the real property or the business granted the
award, which is the subject of the Agreement and Ordinance
Number 2021-4580.
Section 2-382 of the City Code provides as follows
Should any business granted a rebate pursuant to this
division fail to file the annual renewal statement and/or
annual report on or before March 1 of each year the rebate
has been granted as required by this division, fail to
continue to meet the definition of a new business or an
expansion of an existing business, fail to timely inform the
City Commission of a change of ownership, fail to file a
new application upon any change in the information
provided in the original application, fail to fulfill any other
representation made to the City Commission during the
application process, and/or fail to comply with any other
requirement provided for in this division, the City
Commission may, upon 30 days' written notice to the
respective business, adopt an ordinance revoking the rebate
or take such other action with respect to the rebate as it
deems appropriate.
This letter was issued after it became clear that a transfer of ownership occurred without the City
being notified as required. As a result of that failure by the awardee, which is cause for revocation
of the ordinance granting the rebate (Ordinance No. 2021-4580), the repealing ordinance may be
enacted at the City Commission's discretion. The notice requirement has an array of purposes as
articulated by Mr. Lessard at the City Commission's September 23, 2024 meeting. Perhaps the
most salient reason for the City to be advised of any ownership transfers is the fact that the Program
was a new one that was enacted under certain economic circumstances and the City, as it prudently
should in accordance with sound and generally accepted public management practices and
principles, could evaluate the effectiveness of the Program and the manner in which grantee acted
subsequent to the conditional award of grant funds under the Program. Indeed, the ultimate repeal
of the Program indicates that the City was in a process of continuing review as to the economic
benefits derived to the City, to the extent that the City was benefitted.
The City's Supplemental Economic Or Tourism Development Program provided that the City
Commission, at its discretion and on a case-by-case basis, may enter into an incentive agreement
with a person, firm, or corporation providing for incentives in order to encourage and support the
development of real property within the City. Likewise, if an awardee failed to adhere to the
conditions of the award, the award could be revoked at the City Commission's discretion as is
proposed in Ordinance No. 2024-4805 which is now pending before the City Commission for
enactment.
Incentives could be granted in the form of payments of amounts up to, but in no event in the amount
in excess of equal to, the sums paid in fees and taxes that have been duly paid to the City during a
specified period of time. The applicant, in this case, was granted, by means of the enactment of
Ordinance No. 2021-4580, the following conditional and discretionary award:
(1), 70% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the first 5 years in which
the incentivized development is placed on the tax rolls of Seminole
County; and, thereafter;
(2), 50% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the second 5 years in
which the incentivized development is placed on the tax rolls of
Seminole County;
The grant was calculated on new ad valorem tax revenues.
Ordinance No. 2021-4580, which granted the conditional award, is important to review. Specific
provisions of that Ordinance will now be presented.
Section 1 (c) of Ordinance No. 2021-4580 provides as follows:
(c). It is hereby found and determined that the actions taken
herein relative to the incentive award to DK Sanford, LLC is
authorized by Chapter 2, Division 3 of the Code of Ordinances of
the City of Sanford and that the requirements of the Supplemental
Economic Or Tourism Development Program have been met with
regard to approving the application and will be implemented in
accordance with the terms and conditions of an implementing
agreement.
Thus, the provisions of the Program are brought forward into the grant and the manner in which it
was implemented.
Section 2 (a) of Ordinance No. 2021-4580 provides as follows:
(a). The City Commission hereby grants the following incentive
under the provisions of Chapter 2, Division 3 of the Code of
Ordinances of the City of Sanford to DK Sanford, LLC:
(i), 70% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the first 5 years in which
the incentivized development is placed on the tax rolls of Seminole
County; and, thereafter;
(ii), 50% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the second 5 years in
which the incentivized development is placed on the tax rolls of
Seminole County;
all of which calculated on new ad valorem tax revenues consistent
with the provisions and intent of Chanter 2, Division 3 of the
Code of Ordinances of the City of Sanford. (Emphasis added.)
Section 2 (b) of Ordinance No. 2021-4580 provides as follows:
(b). The City's Finance Director shall issue payments to DK
Sanford, LLC, or its successor in interest, consistent with the
incentive award approved in Subsection (a) of this Section after the
new ad valorem tax revenues have been received by the City, which
occurs after the final certificate of occupancy is awarded for the
project, but no later than December 31, 2022 to the effect that
January 1, 2023 shall be the date on which the 10 year rebate period
commences regardless of whether the project has been completed
by December 31, 2022, and in accordance with compliance with the
terms and conditions of the implementing agreement which shall
include, together with the normative terms of an agreement under
the Drovisions of Chapter 2, Division 3 of the Code of Ordinances
of the Citv of Sanford, a provision which ensures that the
development of the property currently owned by DK Sanford.
LLC will be developed as Proposed. (Emphasis added.)
To make the carry forward of the requirements of the City Code under which the Program was
authorized and implemented, Section 3 (b) of Ordinance No. 2021-4580 provides as follows:
(b). All actions of an implementing nature shall occur in strict
conformity to the provisions of Chapter 2, Division 3 of the Code
of Ordinances of the City of Sanford to include, but not be limited
to, the implementing agreement containing the terms and conditions
of the City Commission's approval of this Ordinance. (Emphasis
added.)
Strict conformity is and was required. The failure to provide notice to the City, as outlined in Mr.
Lessard's above -referenced letter clearly outlined that grantee failed to accomplish the actions
required of it in strict compliance with the well stated requirements of the Program
Significantly, it should be noted, the implementing agreement provided that the grantee
covenanted not to sue the City and, if it were to do so, that the payments to the grantee would cease
in that they would be waived and released. The agreement, further, is premised upon the provisions
of the City Code that were in effect at the time the agreement was entered - - which, again, results
from the enactment of the provisions of Ordinance No. 2021-4580 which was premised upon the
provisions of the City Code which it implemented. Indeed, the terms and conditions of the
agreement totally refute the position taken by the current property owner, Railside Loop Owner,
LLC, which, interestingly enough, seems to have yet to contact the City as it is required to do.
Indeed, Section 5 (c) of Ordinance No. 2021-4580 provides as follows:
(c). Nothing in this Ordinance shall be construed, in any way, to
grant any cause of causes of action to DK Sanford, LLC, or its
successors in interest. in any respect or under any legal theory.
Thus, the original grantee and any successor in interest is precluded from filing a lawsuit against
the City. That provision goes hand-in-hand with the City Commission's ability and right to make
a decision in this case based upon the exercise of its discretion. Accordingly, Section 57.105,
Florida Statutes, would be applicable as to the award of attorney's fee and sanctions for raising
unsupported claims as it provides that when a party's attorney knew or should have known that a
claim when initially presented to the Court was not supported by the material facts necessary to
establish the claim or defense or would not be supported by the application of then -existing law to
those material facts, the Court may award attorney's fees.
The prior comments within the original City Commission agenda memorandum for the meeting of
August 26, 2024 are adopted and ratified. That analysis was in response to the letter issued by
Logan J. Opsahl, the attorney representing the current property owner, Railside Loop Owner, LLC
(letter attached). That first agenda memorandum is attached. After the original letter was
transmitted to the City, attorney M. Rebecca Wilson, also representing the current owner, issued a
second letter, providing supplemental rebuttal legal argument, which letter is attached. Ms. Wilson
also presented extensive argument at the City Commission meeting of September 23, 2024. Ms.
Wilson's PowerPoint presentation from that meeting is also attached.
Statutory Interpretation:
An analysis of the provisions of the City Code, the pertinent ordinances, and the agreement, as
presented above and hereafter, do not support the arguments submitted by Mr. Opsahl and Ms.
Wilson.
The textualism theory of statutory interpretation looks for the objective meaning of statutory
language primarily in the text of the statute. The intentionalism theory looks for the subjective
intent of the legislature when it enacted the statute. These doctrines apply to the interpretation of
the provisions of the City Code that are pertinent to the discussion of the matter now before the
City Commission.
The absurdity doctrine provides an exception to the plain meaning canon, which Ms. Wilson has
asserted in her letter. The United States Supreme Court first adopted the absurdity doctrine in
United States v. Kirby, 74 U.S. 482 (1868), establishing:
All laws should receive a sensible construction. General terms
should be so limited in their application as not to lead to injustice,
oppression, or an absurd consequence. It will always, therefore, be
presumed that [a legislative body] intended exceptions to its
language, which would avoid results of this character. The reason
of the law in such cases should prevail over its letter.
Id. at 486-87.
The United States Supreme Court subsequently made it clear in what has been referred to as the
most influential absurdity decision, Holy Trinity Church v. United States, 143 U.S. 457 (1892),
that the rationale for the absurdity doctrine is to avoid a result that is contrary to legislative intent.
The Court held, "[t]he object designed to be reached by the act must limit and control the literal
import of the terms and phrases employed." Id. at 460. In other words, in the event of a
contradiction between legislative intent and plain meaning, a court could find the intent of the
legislative body controlling. The Court further held, "[i]f a literal construction of the words of a
statute be absurd, the act must be so construed as to avoid the absurdity." Id.
The City Commission clearly and distinctly set forth its intent in the Savings Section of Ordinance
No. 2024-4774. That provision does not support the argument of Mr. Opsahl and Ms. Wilson.
They assert, in essence, that the actions of the City in ending the Program under which the grant
was awarded, negated all of the means and methods and terms and conditions under which the
award was granted. Taken to its logical extension, the argument of the current property
owner, Railside Loop Owner, LLC, would result in the conclusion that, since the City Code
was repealed with the effect that its attorneys areue to be applicable, there is no longer anv
leeal authoritv or basis for the Citv to provide it with the funds that it now claims to be some
tvve of vested interest against the City. It is an absurd result to conclude that the City's actions
in terminating the subject Program resulted in the termination of all of the actions and activities
that were taken when the Program was in place. That makes no sense and the Savings provision
of Ordinance No. 2024-4774 makes it clear that the contrary was intended. That is, the awardee
would continue to receive the award funding while the terms and conditions of that award
continued in effect. The Savings provision, which Mr. Opsahl and Ms. Wilson vigorously critique,
actually not only continued the reporting requirement in place, but, also, provided for the
continuation of payments. The unfairness of that argument is clear.
With Regard to the Savings Provision of Ordinance No. 2024-4774:
Indeed, as Mr. Groot showed at the September 23, 2024 City Commission meeting, the Savings
provision was clearly drafted differently from other ordinances to specifically accomplish what
the City staff and the Assistant City Attorney assert that it accomplished.
As Mr. Groot noted at the September 23, 2024 City Commission meeting, the provisions of Section
5 (a) of Ordinance No. 2021-4580 (the Ordinance which granted the grant funding to the applicant
under the Program) stated as follows:
(a). The prior actions of the City of Sanford in terms of the
matters relating to any and all actions and activities of the City
pertaining to the economic or tourism development of the City, or
of an associated nature, are hereby ratified and affirmed.
And, as Mr. Groot noted at the September 23, 2024 City Commission meeting, the provisions of
Section 4 of Ordinance No. 2024-4774 (the Ordinance which repealed the Program) stated as
follows:
The prior actions of the City of Sanford relating to the approval of
applications prior to the effective date of this Ordinance, and any
and all related matters, procedures or processes, are hereby ratified
and affirmed.
As can be clearly and plainly seen, and as Mr. Groot stated at the September 23, 2024 meeting of
the City Commission, the Savings provision was specifically modified from normative language
to ensure that the benefits and obligations of grantees would continue to be in effect under the City
Code provisions relating to the Program and the implementation of that Program. Mr. Opsahl and
Ms. Wilson assert that ALL of the benefits of the Program continue, but NONE of the obligations
under the Program continued. That is an absurd position on its face.
Accordingly, pursuant to the highest law of the land, the plain meaning of the savings provision
cannot be interpreted in a manner which results in an absurdity. Since the Supplemental Economic
Or Tourism Development Program was repealed by Ordinance No. 2024-4774, the Savings
provision cannot be interpreted to apply to new applications because new applications will not
exist. The Savings provision must be interpreted to apply to previously approved applications and,
thus, "any and all" matters related to approved applications and the procedures or processes
applicable to approved applications. Clearly, the continuing performance requirements pertaining
to approved applications constituted and continue to constitute a related matter, as well as the
procedures and processes relating to approved applications. To interpret the Savings provision
otherwise would result in absurd and unjust consequences. Further, the clear intent of the Savings
provision is to apply as broadly as possible to approved applications. The intent of the Savings
provision, by using the language "any and all related matters, procedures or processes," is clearly
to ratify and affirm all provisions of Ordinance No. 2019-4526 which relates to previously
approved applications, including both the benefits afforded by the ordinance and the procedural
obligations of continuing performance. Interpreting Ordinance Number 2024-4774 to have
repealed all aspects of the Supplemental Economic Or Tourism Development Program except
matters pertaining to approval of non-existent future applications is unquestionably an absurd
result. Additionally, accepting the argument that the repeal alleviated the requirements for
approved applications while retaining the benefits is unquestionably an unjust result. Both results
patently defy the City Commission's intent, not to mention negate the public's part of the deal in
granting award.
Discretion Of The City Commission:
When discretion is vested in a judge, a judge has the power to make decisions based on the person's
own judgment and the relevant law. Discretion allows judges to choose from among legally
acceptable alternatives, guided by reason and principles of fairness. Decisions made under the
power of discretion must be sound and not arbitrary, meaning that decisions must be made based
on what is right and equitable under the circumstances.
The Agreement:
The Agreement explicitly incorporates the terms of Ordinance No. 4580 in, among other
provisions, the following recitals:
WHEREAS, the application submitted by DK Sanford, LLC related
to an eligible business under the provisions of Chapter 2, Division 3
of the Code of Ordinances of the City of Sanford; and
WHEREAS, the City Commission of the City of Sanford enacted
Ordinance Number 4580 granting economic incentives under the
City's Supplemental Economic Or Tourism Development Program
to DK Sanford, LLC
WHEREAS, Transit Properties LLC (and DK Sanford, LLC by
joinder hereto) and the City desire to enter into this Agreement for
the purpose of gaining additional assurances by DK Sanford, LLC
(and Transit Properties LLC as the property owner) to the City that
certain expenditures by the City will produce a positive economic
effect in the City as a result of DK Sanford, LLC's activities within
the City; and
WHEREAS, the City finds and declares that it is in the public's best
interest and serves a public purpose to award a grant and/or other
assistance through the City's Supplemental Economic Or Tourism
Development Program to DK Sanford, LLC pursuant to the terms of
this Agreement with Transit Properties LLC.
The recitals were specifically adopted as follows:
Section 1. RECITALS.
The above recitals are true and correct and form a material part of
this Agreement upon which the parties have relied.
The agreement goes on to provide, in pertinent part, as follows:
Section 4. CITY GRANT FUNDS.
(a). The City grants the following incentive under the provisions of
Chapter 2, Division 3 of the Code of Ordinances of the City of
Sanford to Transit Properties LLC relative to development
covenanted to be accomplished by DK Sanford, LLC ...."
(b). The grant shall be calculated on new ad valorem tax revenues
consistent with the provisions and intent of Chapter 2, Division 3 of
the Code of Ordinances of the City of Sanford.
The following Section of the City Code provided for the purpose of the agreement as is explicitly
defined as follows:
Sec. 2-379. - Application for rebate.
(c) Agreement. As a condition to receiving an (sic) rebate, a
business will be required to enter into an agreement with the city, in
a form approved by the city attorney, to ensure that the business
satisfies all requirements associated with the creation of jobs in the
city, the fulfillment of other representations made in applying for the
rebate and the granting of the rebate by the city commission.
Further, the agreement between the City and the grantee provides as follows:
Transit Properties LLC agrees and covenants not to sue the City on
the basis of the matters set forth herein or associated matters and
should Transit Properties LLC file any claim or assertion to
challenge the actions of the City relative to the matters set forth
herein, or otherwise in any way associated with the grant herein, the
development of the real property referenced herein, Transit
Properties LLC shall have waived and released any and all
entitlements arising hereunder regardless of whether implemented
or not implemented or acted upon or not acted upon.
Thus, should the City Commission determine not to take the action desired by the real property
successor owner, Railside Loop Owner, LLC, who now asserts the rights of Transit Properties
LLC, they are all barred from filing a lawsuit against the City seeking any form of judicial relief.
And, if a legal action were initiated against the City, they have agreed that they " ... shall have
waived and released any and all entitlements arising hereunder regardless of whether implemented
or not implemented or acted upon or not acted upon." That is, aside from any such action being
clearly frivolous, as discussed above, the filing of the action would, on its own accord, result in a
waiver and release any payment from the City whatsoever.
The Successors In Interest Argument:
At the September 23, 2024 meeting of the City Commission, Ms. Wilson argued relative to the
fact that the benefits of the Program could be assumed by the successors to the original grantee
under the Program. That is true. Also, true is that the obligations under the Program would
continue. Ms. Wilson noted that her law firm did not handle the closing transaction relating to the
sale of the subject property and, thus, the failure to provide the notice to the City as required which
is the subject of this City Commission meeting. This memorandum will not address the potential
liability of any party for any potential failure to conduct adequate due diligence. However, it is
clear that the rights of any successors in interest where subject to the Program requirements
including, but not limited to, the notice requirement.
Section 5 (d) of Ordinance No. 2021-4580 (the Ordinance approving the grant) provides as
follows:
(d). The benefits of this Ordinance DK Sanford, LLC may be
assigned to the successors in interest of the property relative to
which this Ordinance relates in conformity with the provisions of
Chapter 2. Division 3 of the Code of Ordinances of the Citv of
Sanford. (Emphasis added.)
Had due diligence occurred, clearly the provisions of Ordinance No. 2021-4580 would have been
evaluated and applied to the real estate transaction. Had actions been taken " ... in conformity
with the provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford';
clearly the notice provision would have been implemented. This observation, and the prior
observations, as to the due diligence commentary do not, of course, cast any doubt upon the actions
of Ms. Wilson or her firm as neither she nor her firm were, as has been stated before the City
Commission, involved in the closing of the real estate transaction which invoked the obligation to
provide notice to the City of the transfer of the property that was the subject of the City grant under
the Program.
Conclusion:
In the final analysis, the above analysis is presented to the City Commission and it is presented as
well founded and soundly based in controlling law. However, the ultimate decision of the City
Commission is to be based upon the discretion of the City Commission. In the exercise of that
discretion the City Commission may deny the request of the current property owner, Railside Loop
Owner, LLC, or may approve the request.
Accordingly, based upon the foregoing, City staff recommends revocation of the award for failure
to notify the City of a change in ownership of the real property. The enactment of Ordinance No.
2024-4805 is an action that is clearly within the discretionary powers of the City Commission.
The City Commission continued the first reading of Ordinance No. 2024-4805, to September 23,
2024, on August 26, 2024.
The City Clerk published notice of the continued first reading of Ordinance No. 2024-4805 in the
Sanford Herald on September 22, 2024.
The City Commission approved the continued first reading of Ordinance No. 2024-4805 on
September 23, 2024.
The City Clerk published notice of the 2nd Public Hearing in the Sanford Herald on October 13,
2024.
RECOMMENDATION:
City staff recommends that the City Commission adopt Ordinance No. 2024-4805, as presented
and proposed.
SUGGESTED MOTION:
"I move to adopt Ordinance No. 2024-4805, as proposed."
Attachments: (1). Ordinance No. 2024-4805.
(2). Ordinance No. 2021-4580.
(3). Ordinance No. 2024-4774.
(4). Notice letter of July 15, 2024 from Mr. Lessard.
(5). Letter, dated August 6, 2024, from attorney Logan J. Opsahl.
(6). "City Of Sanford Economic Development Incentive Program Agreement
With Transit Properties LLC".
(7). Business Impact Estimate.
(8). Letter, dated September 5, 2024, from attorney M. Rebecca Wilson.
(9). August 26, 2024 City Commission agenda memorandum (attention called
to legal analysis).
(10). September 23, 2024 City Commission agenda memorandum attention
called to legal analysis).
(11). PowerPoint presentation of Ms. Wilson from September 23, 2024 City
Commission meeting.
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Ordinance No. 2021-4580
An ordinance of the City of Sanford, Florida granting an economic
incentive to DK Sanford, LLC pursuant to the supplemental economic
or tourism development program established in Chapter 2, Division 3 of
the Code of Ordinances of the City of Sanford; providing for legislative
findings and intent; providing for implementing administrative actions
in strict conformity to the provisions of the supplemental economic or
tourism development program; providing for conflicts, providing for a
savings provision and the effect of the ordinance; providing for
severability; providing for non -codification as well as the correction of
scrivener's errors; and providing for an effective date.
Whereas, the City Commission of the City of Sanford, Florida enacted Ordinance
Number 4526 to incentivize economic and tourism development within the City which is
now codified in Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford and
entitled "Supplemental Economic Or Tourism Development Program"; and
Whereas, this Ordinance is enacted pursuant to the home rule powers of the City
of Sanford as set forth at Article VIII, Section 2, of the Constitution of the State of Florida;
Chapter 163, Florida Statutes; Chapter 166, Florida Statutes; and other applicable
controlling law; and
Whereas, the City of Sanford has complied with all requirements and procedures
of Florida law in processing and advertising this Ordinance.
Now Therefore, Be it enacted by the People of the City of Sanford:
Section 1. Legislative Findings And Intent.
(a). The City Commission of the City of Sanford hereby adopts and incorporates
into this Ordinance the recitals (whereas clauses) set forth herein and the provisions of
Section 1 of Ordinance Number 4526 as the legislative and administrative findings and
intent of the City Commission relating to this Ordinance.
(b). Additionally, the City Commission agenda memorandum and related
GRANT MALOY, SEMINOLE COUNTY
CLERK OF CIRCUIT COURT & COMPTROLLER
CFN# 2021031905 Bk:9869 Page:634-643(10Pgs)
REC: 03/10/2021 1:23:53 PM by jeckenroth
RECORDING FEES $86.50
11Page
materials are adopted as the basis for the action taken in this Ordinance as well as the
detailed testimony of applicant personnel at the hearing before the City Commission.
(c). It is hereby found and determined that the actions taken herein relative to the
incentive award to DK Sanford, LLC is authorized by Chapter 2, Division 3 of the Code of
Ordinances of the City of Sanford and that the requirements of the Supplemental Economic
Or Tourism Development Program have been met with regard to approving the application
and will be implemented in accordance with the terms and conditions of an implementing
agreement. The apartment project described in the application before the City is an eligible
business under the provisions of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford.
Section 2. Supplemental Economic Or Tourism Incentive Award; DK
Sanford, LLC. The City Commission of the City of Sanford hereby enacts the following:
(a). The City Commission hereby grants the following incentive under the
provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford to DK
Sanford, LLC:
(i), 70% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the first 5 years in which the
incentivized development is placed on the tax rolls of Seminole County; and,
thereafter;
(ii), 50% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the second 5 years in which the
incentivized development is placed on the tax rolls of Seminole County;
all of which calculated on new ad valorem tax revenues consistent with the provisions and
intent of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford.
21 Page
(b). The City's Finance Director shall issue payments to DK Sanford, LLC, or its
successor in interest, consistent with the incentive award approved in Subsection (a) of this
Section after the new ad valorem tax revenues have been received by the City, which
occurs after the final certificate of occupancy is awarded for the project, but no later than
December 31, 2022 to the effect that January 1, 2023 shall be the date on which the 10
year rebate period commences regardless of whether the project has been completed by
December 31, 2022, and in accordance with compliance with the terms and conditions of
the implementing agreement which shall include, together with the normative terms of an
agreement under the provisions of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford, a provision which ensures that the development of the property currently
owned by DK Sanford, LLC will be developed as proposed.
Section 3. Implementing Administrative Actions.
(a). The City Manager, or designee, is hereby authorized and directed to
implement the provisions of this Ordinance and to take any and all necessary administrative
actions to bring into effect the provisions of this Ordinance.
(b). All actions of an implementing nature shall occur in strict conformity to the
provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford to
include, but not be limited to, the implementing agreement containing the terms and
conditions of the City Commission's approval of this Ordinance.
Section 4. Conflicts.
All ordinances or parts thereof in conflict with this Ordinance are hereby repealed.
Section 5. Savings; Effect Of Ordinance.
(a). The prior actions of the City of Sanford in terms of the matters relating to any
and all actions and activities of the City pertaining to the economic or tourism development
31 Page
of the City, or of an associated nature, are hereby ratified and affirmed.
(b). Nothing in this Ordinance shall be construed to affect any suit or proceeding
impending in any court, or any rights acquired, or liability incurred, or any cause of causes
of action acquired or existing, under any act or ordinance hereby repealed; nor shall any
just or legal right or remedy of any character be lost, impaired or affected by this Ordinance.
(c). Nothing in this Ordinance shall be construed, in any way, to grant any cause
of causes of action to DK Sanford, LLC, or its successors in interest. in any respect or under
any legal theory.
(d). The benefits of this Ordinance DK Sanford, LLC may be assigned to the
successors in interest of the property relative to which this Ordinance relates in conformity
with the provisions of Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford.
Section 6. Codification; Scrivener's Errors.
(a). This Ordinance shall not be codified.
(b). Typographical errors and other matters of a similar nature that do not affect
the intent of this Ordinance, as determined by the City Clerk and City Attorney, may be
corrected with the endorsement of the City Manager, or designee, without the need for a
public hearing.
Section 7. Severability.
If any section, subsection, sentence, clause, phrase, or portion of this Ordinance, or
application hereof, is for any reason held invalid or unconstitutional by any court of
competent jurisdiction, such portion or application shall be deemed a separate, distinct, and
independent provision and such holding shall not affect the validity of the remaining portions
thereof.
Section 8. Effective Date.
41 Page
This Ordinance shall take effect immediately upon enactment with the incentives
being paid only as set forth herein and in no other way and in no other time frame.
Passed and adopted this 25th day of January, 2021.
Attest. City Commission f the City of Sanford,
Florida. It
&jPj— 4,60 " / 1—U&
Traci Houchin, MMC, FCRM, Cit;�-Cjerk4'' :,�; ,��..�Art Woodruff, Ma -6'r
} :. A'•...s .vim f. ,
'A 1.
Approved as to form and
Legality:
William L. Colbert, Esquire 1
City Attorney
51 Page
Ordinance No. 2024-4774
An ordinance of the City of Sanford, Florida repealing all provisions of
Part ll, Chapter 2 — Administration, Article V. - Economic Development,
Division 3. Supplemental Economic or Tourism Development Program of
the Code of Ordinances of the City of Sanford (City Code) to include
Sections 2-373 through 2-385 of the City Code; providing for legislative
findings and intent; providing for implementing administrative actions;
providing for a savings provision; providing for conflicts; providing for
severability; providing for codification and the correction of scrivener's
errors and providing for an effective date.
Whereas, on October 28, 2019, the City Commission of the City of Sanford
enacted Ordinance Number 4526 which enacted the "City of Sanford Supplemental
Economic or Tourism Development Incentive Program Ordinance" which is now codified as
Sections 2-373 through 2-385 of the City Code within Part II, Chapter 2 — Administration,
Article V. - Economic Development, Division 3. Supplemental Economic or Tourism
Development Program of the City Code; and
,.Whereas, the City Commission of the City of Sanford desires to repeal the above -
referenced provisions of the City Code as a result of the vibrant economic health of the City
and abundant development activity within the City and in order to ensure that the economic
development funds and tax revenues of the City are most prudently expended; and
Whereas, this Ordinance is enacted pursuant to the home rule powers of the City
of Sanford as set forth at Article VIII, Section 2, of the Constitution of the State of Florida;
Chapter 166, Florida Statutes, and other applicable controlling law; and is consistent with
the provisions of Section 1.4 of the Seminole County Home Rule Charter pertaining to that
document's relation to municipal ordinances, which provides that "[e]xcept as otherwise
provided by this Charter, municipal ordinances shall prevail over County ordinances to the
extent of any conflict."; and
Whereas, the City Commission of the City of Sanford has deemed approval of this
Ordinance to be in the best interest of the residents and citizens of the City of Sanford and
to further the public health, safety and welfare; and
Whereas, the City Commission of the City of Sanford has complied with all
procedural and substantive requirements of controlling law in enacting this Ordinance.
Now Therefore, be it enacted by the People of the City of Sanford:
Section 1. Legislative Findings and Intent.
The City Commission of the City of Sanford hereby adopts and incorporates into this
Ordinance the recitals (whereas clauses) set forth herein as the legislative and
administrative findings and intent of the City Commission which, together with the agenda
materials, memorandum and staff reports, to the extent that they exist, shall be maintained
consistent with the maintenance schedule for ordinances, as public records of the City.
Section 2. Repealer; Supplemental Economic or Tourism Development
Program.
All provisions of Part ll, Chapter 2 — Administration, Article V. - Economic
Development, Division 3. Supplemental Economic or Tourism Development Program of the
Code of Ordinances of the City of Sanford (City Code) to include Sections 2-373 through 2-
385 of the City Code are hereby repealed.
Section 3. Implementing Administrative Actions.
The City Manager, or designee, is hereby authorized and directed to implement the
provisions of this Ordinance and to take any and all necessary administrative actions to
bring into effect the provisions of this Ordinance.
Section 4. Savings.
2
The prior actions of the City of Sanford relating to the approval of applications prior to
the effective date of this Ordinance, and any and all related matters, procedures or
processes, are hereby ratified and affirmed.
Section 5. Severability.
If any section or portion of a section of this Ordinance proves to be invalid, unlawful
or unconstitutional, it shall not be held to impair the validity, force or effect of any other
section or part of this Ordinance.
Section 6. Conflicts.
All ordinances or parts of ordinances in conflict with this Ordinance are hereby
repealed.
Section 7. Codification; Scrivener's Errors.
(a). The provisions of Section 2 of this Ordinance shall be codified as determined
to be appropriate by the Code codifier and all other sections shall not be codified said
codification to be in either the City Code or Land Development Regulations of the City in the
discretion of the Code codifier.
(b). The sections of this Ordinance may be renumbered or re -lettered and the
words of this Ordinance may be changed to section, article or some other appropriate word
or phrase to accomplish codification in the absolute discretion of the Code codifier.
(c). Typographical errors and other matters of a similar nature that do not affect
the intent of this Ordinance, as determined by the City Clerk and City Attorney, may be
corrected with the authorization of the City Manager, or designee, without the need for a
public hearing.
Section 8. Effective Date.
31
This ordinance shall become effective and be enacted immediately upon its passage
and adoption.
Passed and adopted this 22nd day of April, 2024.
Attest:
Traci Ho{ chi , MMC, FCRM
For wand reliance of the Sanford
City Commission only. Approved as to
form and legality.
&lq
Sanford,
41
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0 CITY OF Item No.
KkNFORD
FLORIDA
CITY COMMISSION MEMORANDUM 24-109
APRIL 22, 2024 AGENDA
TO: Honorable Mayor and Members of the City Commission
PREPARED BY: Cynthia Lindsay, Finance Director
SUBMITTED BY: Norton N. Bonaparte, Jr., ICMA-CM, City Manager
SUBJECT: Repeal Economic of City Code Provisions; Supplemental Economic or
Tourism Development Program; Ordinance No. 2024-4774
STRATEGIC PRIORITIES:
❑ Unify Downtown & the Waterfront
❑ Promote the City's Distinct Culture
❑ Update Regulatory Framework
❑ Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
Adoption of Ordinance No. 2024-4774, to repeal all provisions of Part II, Chapter 2 —
Administration, Article V. — Economic Development, Division 3. Supplemental Economic or
Tourism Development Program of the Code of Ordinances of the City of Sanford (City Code), to
include Sections 2-373 through 2-385, is requested.
FISCAL/STAFFING STATEMENT:
There is no current fiscal impact of repealing the subject provisions of the City Code, but the action
will ensure that revenues are expended in specifically targeted beneficial ways in programs
necessary in the current economic environment. The statutorily required business impact statement
is attached.
BACKGROUND:
On October 28, 2019, the City Commission enacted Ordinance No. 2019-4526 which created the
"City of Sanford Supplemental Economic or Tourism Development Incentive Program". The
Program allows a rebate up to 100% of the assessed value of all improvements made by or for the
use of a development and of all tangible personal property of such development or up to 100% of
the assessed value of all added improvements made to facilitate the qualifying expansion of an
existing business and of the net increase in all tangible personal property acquired to facilitate such
expansion of an existing business if the improvements are made or the tangible personal property is
added or increased.
LEGAL REYIEW:
The Assistant City Attorney prepared Ordinance No. 2024-4774, repealing the provisions of the City
Code providing for the Economic or Tourism Development Program.
The City Commission approved the first reading of Ordinance No. 4774, on April 8, 2024.
The City Clerk published notice of the 2" d Public Hearing in the Sanford Herald on April 14, 2024.
RECOMMENDATION:
City staff recommends that the City Commission adopt Ordinance No. 2024-4774, repealing the
provisions of the City Code relating to the Economic or Tourism Development Incentive Program.
SUGGESTED MOTION:
"I move to adopt Ordinance No. 2024-4774."
Attachments: (1). Ordinance No. 2024-4774
(2). Business Impact Statement.
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Business Impact Estimate
This form should be included in the agenda packet for the item under which the proposed
ordinance is to be considered, and must be posted on the City's website by the time notice of the
proposed ordinance is published.
Proposed ordinance's title/reference: Ordinance No. 2024-4774
An ordinance of the City of Sanford, Florida repealing all provisions of Part II,
Chapter 2 — Administration, Article V. - Economic Development, Division 3.
Supplemental Economic Or Tourism Development Program of the Code of
Ordinances of the City of Sanford (City Code) to include Sections 2-373 through 2-
385 of the City Code; providing for legislative findings and intent; providing for
implementing administrative actions; providing for a savings provision; providing
for conflicts; providing for severability; providing for codification and the
correction of scrivener's errors and providing for an effective date.
The City is of the view that the following exception(s) to the Business Impact Estimate
requirement apply that are checked off in a box below apply to the above -referenced
proposed ordinance, although the City is implementing the procedure required by
statutory law to ensure that no inadvertent procedural issue could impact the enactment
of the proposed ordinance.
❑ The proposed ordinance is required for compliance with Federal or State law or
regulation;
❑ The proposed ordinance relates to the issuance or refinancing of debt;
❑ The proposed ordinance relates to the adoption of budgets or budget
amendments, including revenue sources necessary to fund the budget;
❑ The proposed ordinance is required to implement a contract or an agreement,
including, but not limited to, any Federal, State, local, or private grant, or other
financial assistance accepted by the
❑ The proposed ordinance is an emergency ordinance;
❑ The ordinance relates to procurement; or
❑ The proposed ordinance is enacted to implement the following:
a. Part II of Chapter 163, Florida Statutes, relating to growth policy, county and
municipal planning, and land development regulation, including zoning,
development orders, development agreements and development permits;
b. Sections 190.005 and 190.046, Florida Statutes, regarding community
development districts;
c. Section 553.73, Florida Statutes, relating to the Florida Building Code; or
d. Section 633.202, Florida Statutes, relating to the Florida Fire Prevention Code.
In accordance with the provisions of controlling law, even notwithstanding the fact that,
an exemption noted above may apply, the City hereby publishes the following information:
1. Summary of the proposed ordinance (must include statement of the public purpose,
such as serving the public health, safety, morals, and welfare): The proposed ordinance
repeals all provisions of Part 11, Chapter 2 — Administration, Article V. — Economic
Development, Division 3. Supplemental Economic Or Tourism Development
Program of the Code of Ordinances of the City of Sanford (City Code), to include
Sections 2-373 through 2-385. The action will ensure that revenues are expended
in specifically targeted beneficial ways in programs necessary in the current
economic environment.
2. Estimate of direct economic impact of the proposed ordinance on private, for-profit
businesses in the City: There is no current fiscal impact of repealing the subject
provisions of the City Code and the action will ensure that revenues are expended
in specifically targeted beneficial ways in programs necessary in the current
,economic environment given professional analytical consideration to the current
development trends within the Citv.
3. Estimate of direct compliance costs that businesses may reasonably incur: None
4. Any new charge or fee imposed by the proposed ordinance: None
5. Estimate of the City's regulatory costs, including estimated revenues from any new
charges or fees to cover such costs: None. The proposal will save City revenues for
essential and desirable City programs and activities.
6. Good faith estimate of the number of businesses likely to be impacted by the proposed
ordinance: Indeterminate. The City Commission has broad discretion under the
provisions of the City Code provisions proposed to be repealed to grant economic
incentives. There are numerous other community redevelopment, economic
development and tourism development programs offered by the City, as well as
other City actions that are directed at increasing the economic well being of the
City that creates a very favorable economic climate within the City and which are
pertinent and flexible in the context of the current economic environment and
development trends of and within the City.
zl
7. Additional information (if any, but may wish to include the methodology used to derive
information for #1 and #2, above. For example: City staff solicited comments from
businesses in the City as to the potential impact of the proposed ordinance by contacting
the chamber of commerce, social media posting, direct mail or direct email, posting on
City website, public workshop, etc. You may also wish to include efforts made to reduce
the potential fiscal impact on businesses based on feedback from businesses. You may
also wish to state here that the proposed ordinance is a generally applicable ordinance
that applies to all persons similarly situated (individuals as well as businesses) and,
therefore, the proposed ordinance does not impose costs only upon businesses.): None.
31
VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED AND
REGULAR UNITED STATES MAIL AND EMAIL
July 15, 2024
Mr. James D. Palermo
15436 North Florida Avenue
Suite 200
Tampa, Florida 33613
DK Sanford, LLC
3820 Northdale Boulevard
Suite 10013
Tampa, Florida 33624
Transit Properties LLC
624 Long Lake Drive
Oviedo, Florida 32765
Railside Loop Owner LLC
11 East 44th Street
Suite. 503
New York, New York 10017
SUBJECT: Consideration Of Ordinance Revoking Ad Valorem Tax Rebate; Ordinance
Number 2021-4580; City Of Sanford
Dear Mr. Palermo:
The purpose of this letter is, in accordance with Section 9 (a) of the agreement entitled
"City Of Sanford Economic Development Incentive Program Agreement With Transit
Properties LLC" (hereinafter the "Agreement"), and City of Sanford Ordinance Number
2021- 4580, that the City Commission of the City of Sanford will hear, at its meeting of
August 26, 2024 at 7:00 p.m. an ordinance revoking the ad valorem tax rebate authorized
in Ordinance Number 2021-4580 or take such other action with respect to the rebate as
the City Commission may deem appropriate.
You are further advised that Section 2-381 of the City Code relates to continuing
performance under the tax rebate program and states as follows:
(a) Change in ownership. The business granted a rebate shall inform the City
Commission in writing within ten days as to any changes in ownership of
11Page
the business granted a rebate and it is prohibited and unlawful to fail to do
so. Moreover, the transferee business shall continue to comply with all
rebate requirements and shall assume in writing all of the obligations of the
transferor business provided for in the agreement required by this division.
Failure of the business granted a rebate to notify the City Commission of
any such changes in ownership is cause for revocation of the ordinance
granting the rebate, at the City Commission's discretion.
(b) Annual filings. The ability to receive a rebate for the period granted shall
be conditioned upon the applicant's ability to maintain the development
giving rise to the award of the rebate throughout the entire period. The
applicant shall be required to submit an annual renewal statement and an
annual report to the City Manager, or designee, on or before March 1 of
each year for which the rebate was granted. The annual renewal statement
shall certify that the information provided in the original application has not
changed. The annual report shall provide a report on the status of the
business, evidencing satisfaction of the business maintenance and
continued performance conditions set forth in the application. The report
shall be prepared in substantially the form approved by the City Manager,
or designee, and shall contain such information as the City Manager, or
designee, may reasonably deem necessary for the purpose of determining
continuing performance by the business of the conditions provided for in
this division, the ordinance specifically granting the business an (sic) rebate
and the representations made in the application.
As you know, the City was not notified of the change in property ownership relating to the
real property or the business granted the award, which is the subject of the Agreement
and Ordinance Number 2021-4580.
Section 2-382 of the City Code provides as follows
Should any business granted an rebate pursuant to this division fail to file
the annual renewal statement and/or annual report on or before March 1 of
each year the rebate has been granted as required by this division, fail to
continue to meet the definition of a new business or an expansion of an
existing business, fail to timely inform the City Commission of a change of
ownership, fail to file a new application upon any change in the information
provided in the original application, fail to fulfill any other representation
made to the City Commission during the application process, and/or fail to
comply with any other requirement provided for in this division, the City
Commission may, upon 30 days' written notice to the respective business,
adopt an ordinance revoking the rebate or take such other action with
respect to the rebate as it deems appropriate.
The City Commission, as noted above, will be considering the revocation of the provisions
Ordinance Number 2021-4580 which will, by operation of law, serve to revoke any
benefits deriving from the Agreement. A copy of the proposed ordinance is attached as a
21 Page
courtesy to you.
This letter is written to you without waiver of any type or nature and the City reserves all
rights and remedies available to the City under controlling law.
Thank you for your attention to this matter. Please be governed accordingly.
Sincerely,
CITY O ORD, FLORIDA
Brady Lessard
Director, Economic Development
(407) 688-5015
Enclosure: As stated.
Cc: Mayor Art Woodruff and Members of the City Commission
David Johnson, CFA, Seminole County Property Appraiser
J.R. Kroll, Seminole County Tax Collector
Norton N. Bonaparte, Jr., ICMA-CM, City Manager
Cynthia Lindsay, CPA, CGFO, Director of Finance
William L. Colbert, City Attorney
3 1 P a g e
ULowndes
VIA E-MAIL
City of Sanford
Economic Development
Attn: Brady Lessard, Director
300 N. Park Avenue
Sanford, FL 32771
brady.lessard@sanfordfl.gov
LOGAN J. OPSAHL
Logan.opsahl@lowndes-law.com
215 North Eola Drive, Orlando, Florida 32801-2028
T: (407) 418-6237 1 F: 407-843-4444
MAIN NUMBER: 407-843-4600
TIT MERITAS'LAW FIRMS WORLDWIDE
August 6, 2024
City of Sanford
City Attorney
Attn: William L. Colbert, Esq.
300 International Parkway, Suite 100
Lake Mary, FL 32746
wlcolbert@stenstrom.com
Re: Consideration of Ordinance Revoking Economic Development Incentive
Program Agreement
Dear Mr. Lessard,
This law firm represents Railside Loop Owner, LLC, the owner ("Owner") of that certain parcel of
real property described as Lot 1 of Sanford Station, according to the plat thereof, recorded in Plat Book
87, pages 16 through 19, of the Public Records of Seminole County, Florida, more commonly referred to
as "The Henry" (the "Property") within the City of Sanford, Florida ("City").
The Property is subject to that certain City of Sanford Economic Development Incentive Program
Agreement, dated May 19, 2021, by and between the City and Transit Properties, LLC (the "Agreement").
Pursuant to Section 24 of the Agreement, all terms and conditions "bind upon and inure to the benefit
of the City and Transit Properties LLC and its respective successors -in -interest" (emphasis added). The
Agreement's terms are binding upon the Property and "run with the title" to the Property.
The Owner is a bonafide third -party purchaser of the Property and has paid considerable
consideration for the Property and the rights afforded to the Property which include, without limitation,
the economic development incentive program. Therefore, following Owner's purchase of the Property
on May 22, 2024, the benefit of the Agreement vested with the Owner.
We acknowledge receipt of the attached correspondence dated July 15, 2024, entitled
"Consideration of Ordinance Revoking Ad Valorem Tax Rebate; Ordinance Number 2021-4580; City of
Sanford" ("Letter"). The Letter appears to provide Notice to Owner that the City Commission is
considering a revocation of the tax rebate program afforded to Owner under the terms of the
Agreement.
owndes, Drosdick, Doster, Kantor & Reed, P.A.
0239171\205594\14047242v1
lowndes law.com 'r
August 6, 2024
Page 2
The Letter notes that the City Commission will hear, at its August 26, 2024 meeting, an ordinance
revoking the ad valorem tax rebate authorized in Ordinance Number 2021-4580 "or take such other
action with respect to the rebate as the City Commission may deem appropriate." The Letter makes
reference to Section 2-381 of the City Code relating to "continuing performance under the tax rebate
program" which includes written notice to the City "within ten days as to any changes in ownership of
the business granted a rebate."
Importantly, nothing within the Agreement provides for a change of ownership notice
requirement. Nothing within the Agreement provides the City Commission discretion over the transfer
of the Agreement. Rather, Section 24 of the Agreement makes clear that the terms and conditions of the
Agreement "shall be binding upon the property" and "shall run with title to the same."
On April 22, 2024, prior to the conveyance of the Property, the City Commission passed and
adopted Ordinance 2024-4774 ("Repeal Ordinance") which provided the following:
"All provisions of Part ll, Chapter 2 — Administration, Article V. — Economic
Development, Division 3. Supplemental Economic or Tourism Development Program of the
Code of Ordinances of the City of Sanford (City Code) to include Sections 2-373 through 2-
385 of the Citv Code are hereby repealed." (emphasis added).
The Letter cites, as a basis for the potential revocation of the benefits of the Agreement, to
Section 2-381 of the City Code, and an inapplicable change in ownership notice requirement of the
Property. No such notice requirement exists. The Repeal Ordinance specifically repealed "Sections 2-373
through 2-385 of the City Code". No portion of the Repeal Ordinance provided for a mechanism in which
a notice of change of ownership would be required following the adoption of the Repeal Ordinance.
The Agreement is absent of any change in ownership notice requirement. Even if the Agreement
did specifically cite to a change in ownership notice requirement — which it does not — the Repeal
Ordinance nullified the notice requirements of Section 2-381 cited in the Letter. As stated above, the
Repeal Ordinance was adopted on April 22, 2024. The Owner acquired title to the Property on May 22,
2024. The change in ownership of the Property occurred after the adoption of the Repeal Ordinance.
Therefore, any revocation of the Agreement for failure to abide by terms of a repealed provision of the
Code, and which is not included in the Agreement, is unfounded and unjust.
We request that the City Commission review this matter in light of the Repeal Ordinance and the
Agreement's terms. We are committed to resolving any misunderstandings and will make ourselves
available to discuss. Thank you for your attention to this matter, and we look forward to working with
you on an amicable resolution.
0239171\205594\14047242v1
August 6, 2024
Page 3
Sincerely,
�-
LOGAN J. OPSAHL
UO/UO
encl.: (as stated)
cc: Driven Capital Management LLC
4705 S. Apopka Vineland Road, Suite 206
Orlando, FL 32819
Attn: Sean McLaughlin
Journey Capital
11 East 44th Street, Suite 503
New York, NY 10017
Attn: Peter Calatozzo
0239171\205594\14047242v1
This Instrument Prepared By and Return To:
Tom George
Deputy City Manager
City Hall
300 North Park Avenue
Sanford, Florida 32771
Tax Parcel Identification Numbers:26-19-30-5AE-4900-0000,26-19-30-5AE-490A-0000,
26-19-30-5AE-66OA-0000, 27-19-30-300-0040-0000, and 27-19-30-501-0000-0080
CITY OF SANFORD
ECONOMIC DEVELOPMENT INCENTIVE PROGRAM AGREEMENT
WITH TRANSIT PROPERTIES LLC
THIS AGREEMENT is effective as of the /` iday of __ M i 2021, by and
between the City of Sanford, a political subdivision of and in the state of Florida, whose
address is 300 North Park Avenue, Sanford, Florida 32771 (hereinafter referred as the
"City") and Transit Properties LLC, a Florida limited liability company, whose address is
624 Long Lake Drive, Oviedo, Florida 32765 (with joinder by DK Sanford, LLC., a Florida
limited liability company, authorized to do business and doing business in the State of
Florida, whose address is 15436 North Florida Avenue, Suite 200, Tampa, Florida
33613).
WITNESSETH:
WHEREAS, the City Commission of the City of Sanford, Florida recognizes the
need for economic development and job development within the City; and
WHEREAS, the City Commission of the City of Sanford, Florida desires to provide
incentives in the City economy which will encourage economic development and job
development within the City; and
WHEREAS, economic development incentive programs can provide needed
capital for commercial/industrial development and thereby encourage expansion and job
creation; and
WHEREAS, assisting commercial/industrial development and encouraging job
creation and enhancement of the City's tax base serves a valid public purpose as it
provides for an expanded tax base and for enlarged employment opportunities; and
WHEREAS, the City Commission of the City of Sanford enacted Ordinance
Number 4526 to incentivize economic and tourism development within the City which
Ordinance is now codified in Chapter 2, Division 3 of the Code of Ordinances of the City
of Sanford and entitled "Supplemental Economic Or Tourism Development Program"; and
WHEREAS, DK Sanford, LLC applied for economic incentivization under the
provisions of the City's Supplemental Economic Or Tourism Development Program; and
WHEREAS, the application submitted by DK Sanford, LLC related to an eligible
business under the provisions of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford; and
WHEREAS, the application submitted by DK Sanford, LLC related to real property
(as described in Exhibit "A" attached hereto and incorporated herein) which real property
is owned by Transit Properties LLC who agreed and consented to the application being
submitted to the City of Sanford; and
WHEREAS, the City Commission of the City of Sanford enacted Ordinance
Number 4580 granting economic incentives under the City's Supplemental Economic Or
Tourism Development Program to DK Sanford, LLC; and
WHEREAS, development activities of DK Sanford, LLC will create employment
opportunities within the City and will result in significant capital investments being made
in the City; and;
WHEREAS, Transit Properties LLC (and DK Sanford, LLC by joinder hereto) and
the City desire to enter into this Agreement for the purpose of gaining additional
assurances by DK Sanford, LLC (and Transit Properties LLC as the property owner) to
the City that certain expenditures by the City will produce a positive economic effect in
the City as a result of DK Sanford, LLC's activities within the City; and;
WHEREAS, the City has determined that in order to enhance and preserve the
health, safety, education, and welfare of the citizens of the City it is necessary, proper,
and desirable to enter into this Agreement with Transit Properties LLC in order to enhance
the economic development of the City; and
WHEREAS, the City finds and declares that it is in the public's best interest and
serves a public purpose to award a grant and/or other assistance through the City's
Supplemental Economic Or Tourism Development Program to DK Sanford, LLC pursuant
to the terms of this Agreement with Transit Properties LLC; and
WHEREAS, this Agreement is entered pursuant to the home rule powers of the
City of Sanford as set forth at Article Vlll, Section 2, of the Constitution of the State of
Florida; Chapter 163, Florida Statutes; Chapter 166, Florida Statutes; and other
applicable controlling law.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties do hereby covenant and agree
as follows:
21
SECTION 1. RECITALS.
The above recitals are true and correct and form a material part of this Agreement
upon which the parties have relied.
SECTION 2. REPRESENTATIONS OF THE COMPANY.
Transit Properties LLC hereby represents and warrants to the City the following:
(a). Transit Properties LLC is duly organized and validly existing under the laws
of the State of Florida and is authorized to do and is doing business in the State of Florida.
(b). Transit Properties LLC has the power, authority, and legal right to execute,
deliver, and perform this Agreement. The execution, delivery, and performance of this
Agreement by Transit Properties LLC have been duly authorized by all necessary actions.
(c). Transit Properties LLC's project manager relative to the development
commitments required to be accomplished by DK Sanford, LLC, shall be Reginald
Wallace or his designee.
SECTION 3. COVENANTS OF TRANSIT PROPERTIES LLC.
Transit Properties LLC hereby covenants with the City to complete all development
relating to its business inside the corporate limits of the City as set forth in its application
materials submitted to the City and agrees to create and provide economic development
within the City.
SECTION 4. CITY GRANT FUNDS.
(a). The City grants the following incentive under the provisions of Chapter 2,
Division 3 of the Code of Ordinances of the City of Sanford to Transit Properties LLC
relative to development covenanted to be accomplished by DK Sanford, LLC:
(i), 70% of an amount equal to the sums paid in ad valorem taxes that
have been duly paid to the City during the first 5 years in which the incentivized
development is placed on the tax rolls of Seminole County; and, thereafter;
(ii), 50% of an amount equal to the sums paid in ad valorem taxes that
have been duly paid to the City during the second 5 years in which the incentivized
development is placed on the tax rolls of Seminole County;
(b). The grant shall be calculated on new ad valorem tax revenues consistent
with the provisions and intent of Chapter 2, Division 3 of the Code of Ordinances of the
City of Sanford.
31
(c). The City's Finance Director shall issue payments to Transit Properties LLC,
or its successor in interest, consistent with the incentive award approved in Subsection
(a) of this Section after the new ad valorem tax revenues have been received by the City,
which occurs after the final certificate of occupancy is awarded for the project, but no later
than December 31, 2022 to the effect that January 1, 2023 shall be the date on which the
10 year rebate period commences regardless of whether the project has been completed
by December 31, 2022.
SECTION 5. TERM.
This Agreement shall become effective upon execution by the City and Transit
Properties LLC (with joinder by DK Sanford, LLC) and shall remain in effect through close
out of the Agreement pursuant to and consistent with its terms or until earlier terminated.
SECTION 6. REPORTS.
Transit Properties LLC shall provide the City with reports at least every 12 months
starting on July 1, 2021. These reports shall contain and provide information regarding
the number of new permanent jobs that have been provided by the project, the capital
investment to date as to the project and of all activities affecting the implementation of
this Agreement including, but not limited to, a narrative summary of progress on the
project in the report form approved by the City.
SECTION 7. PUBLIC RECORDS.
(a). IF TRANSIT PROPERTIES LLC HAS QUESTIONS
REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA
STATUTES, TO THE TRANSIT PROPERTIES LLC'S DUTY TO PROVIDE
PUBLIC RECORDS RELATING TO THIS AGREEMENT, CONTACT THE
CUSTODIAN OF PUBLIC RECORDS AT (407) 688-5012, TRACI
HOUCHIN, MMC, FCRM, CITY CLERK, CITY OF SANFORD, CITY HALL,
300 NORTH PARK AVENUE, SANFORD, FLORIDA 32771,
TRACI.HOUCHIN@SANFORDFL.GOV.
(b). In order to comply with Section 119.0701, Florida Statutes, public records
laws, Transit Properties LLC must:
(i). Keep and maintain public records that ordinarily and necessarily
would be required by the City in order to perform the service.
(ii). Provide the public with access to public records on the same terms
and conditions that the City would provide the records and at a cost that does not
31
exceed the cost provided in Chapter 119, Florida Statutes, or as otherwise
provided by law.
(iii). Ensure that public records that are exempt or confidential and
exempt from public records disclosure requirements are not disclosed except as
authorized by law.
(iv). Meet all requirements for retaining public records and transfer, at no
cost, to the City all public records in possession of the Vendor upon termination of
this Contract and destroy any duplicate public records that are exempt or
confidential and exempt from public records disclosure requirements. All records
stored electronically must be provided to the City in a format that is compatible with
the information technology systems of the City.
(c). If Transit Properties LLC does not comply with a public records request, the
City shall enforce the provisions of this Contract in accordance with the terms and
conditions of this Contract.
(d). Failure by Transit Properties LLC to grant such public access and comply
with public records requests shall be grounds for immediate unilateral cancellation of this
Agreement by the City. Transit Properties LLC shall promptly provide the City with a copy
of any request to inspect or copy public records in possession of Transit Properties LLC
and shall promptly provide the City with a copy of Transit Properties LLC's response to
each such request.
SECTION 8. RECORDS AND AUDITS.
(a). Transit Properties LLC shall maintain in its place of business all books,
documents, papers, and other evidence pertaining to work performed under this
Agreement. Such records shall be and remain available at Transit Properties LLC's
place of business at all reasonable times during the term of this Agreement and for five 5
years after Agreement closure.
(b). Transit Properties LLC agrees that the City or its duly authorized
representatives shall, until the expiration of 5 years after Agreement closure, have access
to examine any of Transit Properties LLC's books, documents, papers, and records
involving transactions related to this Agreement. Transit Properties LLC agrees that
payments made under this Agreement shall be subject to reduction for amounts charged
which are found, based on audit examination.
(c). Transit Properties LLC shall provide proper facilities for access to and
inspection of all required records.
SECTION 9. NOTICES.
-i
(a). Whenever either party desires to give notice unto the other, notice may be
sent to:
Com:
Norton N. Bonaparte, Jr., ICMA-CM
City Manager
City Of Sanford
300 North Park Avenue
Sanford, Florida 32771
Transit Properties LLC:
James D. Palermo, Esquire
15436 North Florida Avenue
Suite 200
Tampa, Florida 33613
(b). Either of the parties may change, by written notice as provided herein, the
addresses or persons for receipt of notices or invoices. All notices shall be effective
upon receipt.
SECTION 10. INDEMNITY AND INSURANCE.
(a). Transit Properties LLC is responsible for all personal injury and property
damage attributable to its acts and omissions and those of its officers, employees, and
agents.
(b). Transit Properties LLC shall indemnify, save and hold harmless the City and
all of its respective officers, agents, and employees from and against all losses and all
claims, demands, payments, suits, actions, recoveries, and judgments of every nature
and description whatsoever including, but not limited to, claims for property damage and
claims for injury to or death of persons and by reason of any act or omission of the Transit
Properties LLC, its officers, agents, contractors, subcontractors and employees. Further,
Transit Properties LLC shall provide necessary workers compensation coverage and
unemployment compensation for its employees as well as all other normative or pertinent
insurance coverages.
(c). The parties further agree that nothing contained herein shall be construed
or interpreted as the City of any remedy or defense available to the City under the laws
of the State of Florida, or as a waiver of sovereign immunity by the City beyond the waiver
provided for in Section 768.28, Florida Statutes, and, then, with regard to the City, only
as to negligent acts under controlling State law.
3
(d). Transit Properties LLC agrees and covenants not to sue the City on the
basis of the matters set forth herein or associated matters and should Transit Properties
LLC file any claim or assertion to challenge the actions of the City relative to the matters
set forth herein, or otherwise in any way associated with the grant herein, the
development of the real property referenced herein, Transit Properties LLC shall have
waived and released any and all entitlements arising hereunder regardless of whether
implemented or not implemented or acted upon or not acted upon.
SECTION 11. CONFLICT OF INTEREST.
(a). Transit Properties LLC agrees that it will not engage in any action that would
create a conflict of interest in the performance of its obligations pursuant to this
Agreement with the City or which would violate or cause others to violate the provisions
of Part ///, Chapter 112, Florida Statutes, relating to ethics in government.
(b). Transit Properties LLC hereby certifies that no officer, agent or employee of
the City has any material interest (as defined in Section 112.312, Florida Statutes) either
directly or indirectly, in the business of Transit Properties LLC to be conducted here, and
that no such personal shall have any such interest at any time during the term of this
Agreement.
SECTION 12. EQUAL OPPORTUNITY EMPLOYMENT.
Transit Properties LLC agrees that it will not discriminate against any contractor,
employee or applicant for employment or work under this Agreement, because or on
account of race, color, religion, disability, sex, age, national origin or any other basis of
unlawful discrimination and will ensure that applicants are employed and employees are
treated during employment without regard to race, color, religion, sex, age, or national
origin. This provision shall include, but not be limited to, the following: retention, award of
contracts, employment, upgrading, demotion or transfer, recruitment advertising, layoff or
termination, rates of pay or other forms of compensation, and selection for training,
including apprenticeship.
SECTION 13. COMPLIANCE WITH LAWS AND REGULATIONS, EFFECT OF
AGREEMENT.
(a). In performing under this Agreement, Transit Properties LLC shall abide by
all laws, statutes, ordinances, rules, and regulations pertaining to, or regulating the
performance set forth herein including, but not limited to, those now in effect and hereafter
adopted. Any material violation of said laws, statutes, ordinances, rules or regulations
shall constitute a material breach of this Agreement, and shall entitle the City to terminate
this Agreement immediately upon delivery of written notice of termination to Transit
Properties LLC.
71
(b). Transit Properties LLC agrees that the City is not responsible for the
construction or creation of public facilities or capacity in order to facilitate the development
of the real property referenced herein and, without limiting the generality of the foregoing,
Transit Properties LLC shall pay all impact fees applicable to the development which is
the subject of this Agreement.
(c). This Agreement shall not limit the future exercise of the police powers or
land development regulatory powers of the City in any manner.
SECTION 14. EMPLOYEE/COMPANY STATUS.
(a). Persons employed or retained by Transit Properties LLC in the performance
of services and functions pursuant to this Agreement shall have no claim to pension,
workers compensation, unemployment compensation, civil service or other employee
rights or privileges granted to the City officers and employees, either by operation of law
or by the City.
(b). Transit Properties LLC assumes total responsibility for salaries,
employment benefits, contractual rights and benefits, contract payments, Federal, State
and local employment taxes, if any, attributable to Transit Properties LLC personnel and
its officers, agents, contractors, subcontractors and employees, and agrees to indemnify
and hold the City harmless from any responsibility for same.
(c). In performing this Agreement, planning, developing, constructing, equipping
and operating the project or carrying out any of the activities to be carried out by Transit
Properties LLC, Transit Properties LLC will be acting independently, in the capacity of
any independent entity, and not as a joint venturer, partner, associate, employee, agent
or representative of the City.
SECTION 15. NO THIRD -PARTY BENEFICIARIES.
This Agreement is made for the sole benefit of the parties hereto and their
respective successors and assigns, including any successor in interest to Transit
Properties LLC's interest in the project, and is not intended to and shall not benefit any
third party. No third party shall have any rights hereunder or as a result of this Agreement
or any right to enforce any provisions of this Agreement.
SECTION 16. GOVERNING LAW/ATTORNEY'S FEES.
This Agreement shall be construed and interpreted according to the laws of the
State of Florida. In the event of litigation between the parties arising from or pertaining to
this Agreement, the prevailing party shall be entitled to recover from the other, reasonable
trial and appellate attorneys, fees and costs. Venue shall be in the Eighteenth Judicial
a
Circuit Court in and for Seminole County, Florida.
SECTION 17. CONSTRUCTION OF AGREEMENT.
This Agreement shall not be construed more strictly against one party than against
the other merely by virtue of the fact that it may have been prepared by counsel for one
of the parties it being recognized that both parties, the City and Transit Properties LLC,
have contributed substantially and materially to the preparation hereof.
SECTION 18. CONSTITUTIONAL AND STATUTORY LIMITATION ON
AUTHORITY OF THE CITY.
The terms and conditions of this Agreement placed upon the City are applicable
only to the extent they are within and consistent with the constitutional and statutory
limitations on the authority of the City. Specifically, the parties acknowledge that the City
is without authority to grant or pledge a security interest in any of the City's revenue
sources or property.
SECTION 19. - EVENTS OF DEFAULT/REMEDIES.
For the purposes of this Agreement, "Event of Default" shall mean any
representation or warranty made by Transit Properties LLC herein or in any statement or
certificate furnished to the City in connection with this Agreement or the application
relating thereto or to the project proves to be untrue in a material respect as of the date
of issuance or making thereof and shall not be corrected or brought into compliance within
such time as may be required by the City.
SECTION 20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which,
when executed and delivered, shall be an original, but all counterparts shall together
constitute one and the same instrument.
SECTION 21. HEADINGS.
All sections and descriptive headings in this Agreement are inserted for
convenience only, and shall not affect the construction or interpretation hereof.
SECTION 22. TIME.
Time is of the essence of this Agreement.
a
SECTION 23. SEVERABILITY.
If any provision, term or clause of this Agreement is determined to be invalid or
unenforceable by a Court of competent jurisdiction, said determination shall not, in any
way, effect the obligation of the parties provided for or referred to herein and, to that end,
the provisions of this Agreement shall be deemed severable. However, such invalidity or
unenforceability shall preclude the continuing effect of this Agreement if a failure of
consideration or a failure of the public benefits intended to be derived were to occur.
SECTION 24. SUCCESSORS AND ASSIGNS.
(a). This Agreement and the terms and conditions hereof shall be binding upon
and inure to the benefit of the City and Transit Properties LLC and its respective
successors -in -interest the terms and conditions of this Agreement shall be binding upon
the property described in Exhibit "A" and shall run with title to the same.
(b). This Agreement touches and concerns the aforementioned real property.
(c). Transit Properties LLC has expressly covenanted and agreed to this
provision and all other terms and provisions of this Agreement.
SECTION 25. AMENDMENT, WAIVER, ENTIRE AGREEMENT.
(a). This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof, and may not be modified or amended except by a written
instrument equal in dignity herewith and executed by the parties to be bound thereby.
(b). No waiver or consent to any departure from any term, condition or provision
of this Agreement shall be effective or binding upon any party hereto unless such waiver
or consent is in writing, signed by an authorized officer of the party giving the same and
delivered to the other party.
(c). Transit Properties LLC agrees that no representations have been made by
the City in order to induce Transit Properties LLC to enter into this Agreement other than
as expressly stated in this Agreement.
IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement for the purposes stated herein.
SIGNATURE BLOCKS FOLLOW:
101
ATTEST.-
4� 7�
Signature of Witn ss # 1
Printed Name:
Signature of Wi ess # 2
Printed Name: ,-.ar- �`�z t+ -V
STATE OF FLORIDA I
COUNTY OF SEMINOLE )
TRANSIT PROPERTIES LLC, a Florida
limited liability company.
TRANSIT PROPERTIES LLC, a Florida
limited liability company.
By: Kevin M. Wydra, its sole manager.
I Hereby Certify that on this day, before me, an officer duly authorized to
administer oaths and take acknowledgments, personally appeared Kevin M. Wydra and
he acknowledged, under oath, executing the same in the presence of two subscribing
witnesses freely and voluntarily and he is personally known to me or provided
Flc,ti.cAo,: as identification.
Uc-e N sl'--
Witness
•-eWitness my hand and official seal in the County and State last aforesaid this 15
day of 14a4 , 2021.
(Affix Notary S ROCIO PEREIRO � ��
Notary Public, State 3 Florida Nota Pu
Commission# GG 345272 Notary bli�Z State of Pn,j,,jc.
My comm. expires Aug. 24, 2023 Print Name:
ADDITIONAL SIGNATURE BLOCK FOLLOWS:
JOINDER AND AGREEMENT:
The undersigned joins and agrees to all of the terms and conditions of this Agreement in
a plenary manner, on behalf of itself and its successors, assigns and transferees of any
nature whatsoever, and consents to and agree with the covenants and to perform and
fully abide by the provisions, terms, conditions and commitments set forth in this
Agreement and, further, the undersigned covenant that they have full and complete
authority to bind the undersigned:
WITNESSES: DK SANFORD, LLC, a Florida limited
liability company
By: DeBartolo Development, LLC, its
Manager
By Edwar _Kolael.-itMap�ger
Signat re of Witness # 1 Signature of Witness # 2
Printed Name: Printed Name:
STATE OF FLORIDA
COUNTY OF SEMINOLE )
I Hereby Certify that on this day, before me, an officer duly authorized to
administer oaths and take acknowledgments, personally appeared Edward M. Kobel and
he acknowledged, under oath, executing the same in the presence of two subscribing
witnesses freely and voluntarily and he is personally known to me or provided
as identification.
Witness mY, hand and official seal in the County and State last aforesaid this
day of JrF ,f,r :/ (�i 2021.
(Affix Notary Seal) 1/tr
Notary Public; State of T
Print Name:
ADDITIONAL SIGNATURE BLOCK FOLLOWS:
ANDREA SCHOOP
!�`•. Notary Public - State of Florida
Commission N GG 959253
or n My Comm. Expires Jun 13, 2024
Bonded through National Notary Assn. 12
ATTEST
0
Traci Ho ch MC, CRM
it Clerk
h L-OPm9b ")—' pcz�®
For us6 and reliance of the
Sanford City Commission only. " I
Approved as to form and legality.
William L. Colbert, Esquire, City Attorney
CITY OF SAN
Art M
Mayor
D
DA
131
KFORp
r •
FLORIDA
Business Impact Estimate
This form should be included in agenda packet for the item under which the proposed ordinance
is to be considered, and must be posted on the City's website by the time notice of the proposed
ordinance is published.
An ordinance of the City of Sanford, Florida repealing Ordinance
Number 2021-4580 which implemented an award under the provisions
of Part II, Chapter 2 — Administration, Article V. - Economic
Development, Division 3. Supplemental Economic Or Tourism
Development Program of the Code of Ordinances of the City of
Sanford (City Code); further repealing and rescinding any
implementing agreements; providing for legislative findings and
intent; providing for implementing administrative actions; providing
for a savings provision; providing for conflicts; providing for
severability; providing for codification and the correction of
scrivener's errors and providing for an effective date.
The City is of the view that the following exception(s) to the Business Impact Estimate
requirement, that are checked off in a box below, apply to the above -referenced proposed
ordinance. Although, the City is implementing the procedure required by statutory law to
ensure that no inadvertent procedural issue could impact the enactment of the proposed
ordinance.
❑ The proposed ordinance is required for compliance with Federal or State law or
regulation;
❑ The proposed ordinance relates to the issuance or refinancing of debt;
❑ The proposed ordinance relates to the adoption of budgets or budget
amendments, including revenue sources necessary to fund the budget;
❑ The proposed ordinance is required to implement a contract or an agreement,
including, but not limited to, any Federal, State, local, or private grant, or other
financial assistance accepted by the
❑ The proposed ordinance is an emergency ordinance;
❑ The ordinance relates to procurement; or
❑ The proposed ordinance is enacted to implement the following:
a. Part II of Chapter 163, Florida Statutes, relating to growth policy, county and
municipal planning, and land development regulation, including zoning,
development orders, development agreements and development permits;
b. Sections 190.005 and 190.046, Florida Statutes, regarding community
development districts;
c. Section 553.73, Florida Statutes, relating to the Florida Building Code; or
d. Section 633.202, Florida Statutes, relating to the Florida Fire Prevention Code.
In accordance with the provisions of controlling law, even notwithstanding the fact that,
an exemption noted above may apply, the City hereby publishes the following information:
1. Summary of the proposed ordinance (must include statement of the public purpose,
such as serving the public health, safety, morals, and welfare):
See City Commission agenda memorandum.
2. Estimate of direct economic impact of the proposed ordinance on private, for-profit
businesses in the City:
Under the provisions of the "City of Sanford Supplemental Economic or Tourism
Development Incentive Program Ordinance" which was codified as Sections 2-373
through 2-385 of the City Code within Part II, Chapter 2 — Administration, Article V. -
Economic Development, Division 3. Supplemental Economic Or Tourism Development
Program of the City Code, since the award under that Program, the awardee has paid
approximately 70% less than it would have without the award by the City. The City will,
with approval of Ordinance No. 2024-4805, receive the full tax revenue as apportioned to
the City based on the assessment value assigned by the office of the Seminole County
Property Appraiser, David Johnson.
3. Estimate of direct compliance costs that businesses may reasonably incur:
None.
z�
4. Any new charge or fee imposed by the proposed ordinance:
None. The funds that were paid to the awardee each year were paid as a matter of
legislative grace. The awardee did not have a vested right. It had a contingent award and
the awardee failed to perform the basic contingency of notifying the City when a change
in real property ownership occurred.
5. Estimate of the City's regulatory costs, including estimated revenues from any new
charges or fees to cover such costs:
None. There are no new regulatory costs being incurred by the and there are no revenues
deriving from charges that would be assessed to cover such costs.
6. Good faith estimate of the number of businesses likely to be impacted by the proposed
ordinance:
The owner of the subject real property unless there is liability to another business for
failure to provide the required notice of change of ownership to the City.
7. Additional information
Reference to the City staff report/agenda memorandum and the public hearings on the
proposed Ordinance may be of assistance.
31
Lowndes
LOCAL ROOTS. BROAD REACH.
VIA E-MAIL
City of Sanford
Economic Development
Attn: Brady Lessard, Director
300 N. Park Avenue
Sanford, FL 32771
brady.lessard@sanfordfl.gov
M. REBECCA WILSON
Shareholder
rebecca.wilson@lowndes-law.com
215 North Eola Drive, Orlando, Florida 32801-2028
T: 407-418-6250 1 F: 407-843-4444
MAIN NUMBER: 407-843-4600
VMERITAS' W RMSWORLOWIDE
September 5, 2024
City of Sanford
City Attorney
Attn: Lonnie Groot, esq.
300 International Parkway, Suite 100
Lake Mary, FL 32746
Igroot@stenstrom.com
Re: Response to City Commission Memorandum 24-247;
Consideration of Ordinance RevokiftgEconomic Development Incentive
Program Agreement
Dear Gentlemen,
As you are aware, this law firm represents Railside Loop Railside, LLC, ("Railside") the owner of
that certain parcel of real property described as Lot 1 of Sanford Station, according to the plat thereof,
recorded in Plat Book 87, pages 16 through 19, of the Public Records of Seminole County, Florida, more
commonly referred to as "The Henry" (the "Property") within the City of Sanford, Florida ("City").
I. Background
On January 25, 2021, the City approved Ordinance No. 4580 which awarded an economic
incentive under the provisions of the City's Supplemental Economic Or Tourism Development Program
(the "Incentive Ordinance"). On May 19, 2021, the City entered into that certain City of Sanford
Economic Development Incentive Program Agreement, by and between the City and Transit Properties,
LLC (the "Agreement"). Pursuant to Section 24 of the Agreement, all terms and conditions "bind upon
and inure to the benefit of the City and Transit Properties LLC and its respective successors -in -interest"
(emphasis added). The Agreement's terms are binding upon the Property and "run with the title" to the
Property.
M
0239171\205594\14121214v3
September 4, 2024
Page 2
On May 22, 2024, Railside, as a bonafide third -party purchaser, acquired the Property from
Transit Properties, LLC. Per the terms of the Agreement, following Railside's purchase of the Property,
the benefit of the Agreement vested with Railside.
The City is now considering a revocation of the Agreement for failure to comply with a provision
of a repealed ordinance. We are in receipt of the City Commission Memorandum 24-247 (the
"Memorandum") relating to the repeal of the Agreement.
II. Economic Incentive Program Repeal Ordinance (2024-4774)
On April 22, 2024, priorto the conveyance of the Propertyfrom Transit Properties, LLCto Railside,
the City Commission passed and adopted Ordinance 2024-4774 ("Repeal Ordinance") which specifically
repealed Sections 2-373 through 2-385 of the City Code. Railside acquired title to the Property on May
22, 2024. The change in ownership of the Property occurred approximately one month after the
adoption of the Repeal Ordinance.
III. Savings Clause
The threshold issues to be decided by the City Commission is whether Sections 2-373 through 2-
385 of the City Code were in effect at the time of the change of ownership — they were not — or whether
the Repeal Ordinance's Savings clause specifically provides for an enduring requirement to notify the
City of a change in ownership of the Property.
As noted in the Memorandum, the Savings clause of the Repeal Ordinance states as follows:
"Savings.
The prior actions of the City of Sanford relating to the approval of applications prior to the
effective date of this Ordinance, and any and all related matters, procedures or processes,
are hereby ratified and affirmed." [emphasis added].
It is clear that that the Savings clause only contemplated the "approval of applications". The procedures
or processes referenced in the Savings clause decisively state that they are "related matters" to the
approval of applications — not a notice requirement.
A plain reading of the one sentence Savings clause would not lead a reasonable mind to think
that the benefits of the Agreement were somehow repealed. Instead, the Savings clause protects the
"approval of applications" that were made prior the effective date of the Repeal Ordinance and any and
all "related matters, procedures, or processes" to the approval of applications. If the Repeal Ordinance
0239171\205594\14121214v3
September 4, 2024
Page 3
did not save the approval of applications, then the City may find itself in breach of any incentive
agreement.
The Savings clause must be narrowly interpreted to apply to the "approval of applications" and
not any section of the repealed provision of the City Code. Under Florida law, statutory interpretation
begins with the plain language of the statute or ordinance. If the language is clear and unambiguous,
courts are bound by the text, as they cannot extend or limit the express terms. See Schoeff v. R.J.
Reynolds Tobacco Co., 232 So. 3d 294, 312 (Fla. 2017); See Also Fla. Research Inst. for Equine Nurturing,
Dev. & Safety, Inc. v. Dillon, 247 So. 3d 538, 543 (Fla. 4th DCA 2018)).
The Savings clause expressly mentions only "approval of applications" and related matters.
Applying the legal doctrine of expressio unius est exclusio alterius, the explicit mention of one thing
implies the exclusion of others. Here, the explicit mention of applications excludes all other portions of
the repealed Sections 2-373 through 2-385 — let alone a notice of change of ownership. Florida courts
reject expansive interpretations of savings clauses that contradict legislative intent and which would
produce an "unreasonable or ridiculous" result. See Maddox v. State, 923 So. 2d 442, 446 (Fla. 2006)).
It is difficult to imagine a scenario in which City Staff recommends to the City Commission an
ordinance, which provides for a wholesale repeal of an Economic Development Program, which
specifically states that "Sections 2-373 through 2-385 of the City Code are hereby repealed" and yet
intends that the notice requirement contained in Section 2-381 be preserved despite its explicit repeal.
Under this logic, any portion of the now repealed Sections 2-373 through 2-385 of the City Code can be
cherry picked and arbitrarily applied to the detriment of a party to the Agreement.
The language of an ordinance's saving clause is crucial to understanding what, if anything, is being
exempted from the laws created by virtue of the ordinance. Often, as is the case here, a savings clause
is specific (i.e. exempting actions "relating to the approval of applications") while other examples are
intentionally broad. For example, Ordinance No. 2021-4580, which created the Supplemental Economic
Or Tourism Development Program, contains its own savings clause which provides as follows:
"The prior actions of the City of Sanford in terms of the nature of the matters relating to
any and all actions and activities of the City pertaining to the economic or tourism
development of the City, or of an associated nature, are hereby ratified and affirmed."
This savings clause is pertaining to all actions and activities of economic or tourism development.
It is noticeably absent of a qualifier such as the approval of applications. The Savings clause is absent
both a specific mention of the notice requirement and a broad statement pertaining to the economic or
tourism development of the City. This makes sense. Why would the City Commission repeal Sections 2-
0239171\205594\14121214v3
September 4, 2024
Paee 4
373 through 2-385 of the City Code if the intent was to maintain the ability to impose those very
sections?
IV. No Damage to Citv
It is important to note that subsection (a) of the repealed Section 2-381 provided for a notification
of a change in ownership only. Section 2-381 did not provide the City with any authority to deny or
otherwise limit a transfer of ownership. The Agreement makes no reference to a change of ownership
notification requirement. The City was not deprived of any right or privilege by not receiving notification
of a change of ownership under the authority of a repealed provision of the City Code.
V. Compliance with Code
The City Attorney also makes reference to Section 13 of the Agreement as a basis for compliance
of the repealed notice requirement. Subsection (a) of Section 13 provides:
"in performing under this Agreement, Transit Properties LLC shall abide by all laws,
statutes, ordinances, rules, and regulations pertaining to, or regulating the performance
set forth herein including, but not limited to, those now in effect and hereafter adopted."
As stated, when the Agreement was originally executed, performance under the Agreement
required compliance with all existing laws, statutes, ordinances rules and regulations — and those
adopted after the execution of the Agreement. Following the Repeal Ordinance, the notice requirement
relating to notice of change of ownership was not in effect. There was no ordinance to abide by under
the terms of Section 13. Railside agrees that it is required to abide by existing ordinances. The notice
requirement relating to change of ownership is not an existing ordinance.
VI. Contractual Obligations
The Agreement does not contain a change of ownership notice requirement. Railside is a
bonafide third -party purchaser of the Property and is entitled to the benefits of the Agreement which
explicitly run with the land. As Railside is the successor -in -interest to the Property, the Agreement is
binding upon, and inures to the benefit of, Railside. In determining the rights and obligations of each
party to the Agreement, a reviewing party must look to the four -corners of the Agreement itself.
Nowhere in the Agreement was a requirement of, or citation to, a change of ownership notice
requirement.
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September 4, 2024
Pase 5
Even if the Agreement did specifically cite to Section 2-381 of the City Code, no party could
perform under the Code section as it has been repealed and was of no force or effect at the time Railside
took ownership of the Property. While the award of the economic incentives included in the Agreement
may have been an act of legislative grace at the enactment of the Incentive Ordinance, once approved,
the City entered into a contractual obligation to perform under the terms and conditions of the
Agreement. Basing a proposed revocation of the Agreement on a notice of change of ownership
requirement under a repealed provision of the Code is unsubstantiated by the Code. A revocation of the
binding Agreement would open the City to considerable liability by needlessly placing the City in breach
of the Agreement.
VII. Conclusion
We respectfully request that the City Commission review this matter in light of the Repeal
Ordinance and the Agreement's terms. We are committed to resolving any misunderstandings and will
make ourselves available to discuss. Thank you for your attention to this matter, and we look forward to
working with you on an amicable resolution.
Sincerely,
V 1/"
M. Rebecca Wilson
MRW/LJO
encl.: (as stated)
cc: Driven Capital Management LLC
4705 S. Apopka Vineland Road, Suite 206
Orlando, FL 32819
Attn: Sean McLaughlin
Journey Capital
11 East 44th Street, Suite 503
New York, NY 10017
Attn: Peter Calatozzo
0239171\205594\14121214v3
CITY OF
SkNFORD WS -RM X
Y FLORIDA Item No.
CITY COMMISSION MEMORANDUM 24247
AUGUST 12, 2024 AGENDA
TO: Honorable Mayor and Members of the City Commission
PREPARED BY: Brady Lessard, Economic Development Director
SUBMITTED BY: Norton N. Bonaparte, Jr., ICMA-CM, City Manager
SUBJECT: Supplemental Economic or Tourism Development Incentive Program;
Ordinance No. 2024-4805 Repealing Ordinance No. 2021-4580
STRATEGIC PRIORITIES:
❑ Unify Downtown & the Waterfront
® Promote the City's Distinct Culture
❑ Update Regulatory Framework
® Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
Approval of Ordinance No. 2024-4805 on first reading, which repeals Ordinance No. 2021-4580
is requested.
FISCAL/STAFFING STATEMENT:
Under the provisions of the "City of Sanford Supplemental Economic or Tourism Development
Incentive Program Ordinance" which was codified as Sections 2-373 through 2-385 of the City
Code within Part II, Chapter 2 — Administration, Article V. - Economic Development, Division 3.
Supplemental Economic Or Tourism Development Program of the City Code, since the award
under that Program, the awardee has paid approximately 70% less than it would have without the
award by the City. The City will, with approval of Ordinance No. 2024-4805, receive the full tax
revenue as apportioned to the City based on the assessment value assigned by the office of the
Seminole County Property Appraiser, David Johnson.
BACKGROUND:
In 2019, the City Commission enacted the "Supplemental Economic or Tourism Development
Incentive Program Ordinance" (Ordinance No. 2019-4526). That Ordinance was codified in
Chapter 2, Division 3 of the Code of Ordinances of the City of Sanford and was entitled
"Supplemental Economic Or Tourism Development Program". The City's Supplemental
Economic or Tourism Development Incentive Program provided that the City Commission, at its
discretion and on a case-by-case basis, could enter into an incentive agreement with a person, firm,
or corporation providing for incentives in order to encourage and support the development of real
property within the City. Each incentive agreement was subject to approval by the City
Commission by means of the enactment of an ordinance. This was a program of legislative grace
and discretion that was put into place not as an entitlement for property owners to implement, but
as an opportunity to be awarded funds based upon ad valorem tax revenues collected, subject to
the conditions and restrictions imposed by the City. The funds could be awarded to applicants if
the public interest was benefitted, and the awardee adhered to the requirements and conditions of
the award.
In 2021, DK Sanford, LLC a Florida limited liability company, applied for an incentive award
under the provisions of the City's Supplemental Economic Or Tourism Development Program.
Debartolo Development, LLC, of Tampa, was the sole manager of the entity at the time. Edward
M. Kobel, also of Tampa, was the sole manager and member of that entity. Transit Properties LLC
was the owner of the property that was the subject of the application. The sole manager of the
property owner was Kevin M. Wydra. There were various organizational structures and interests
relative to the applicant presented by the applicant.
On July 15, 2024, Brady Lessard, the City's Economic Development Director, issued a notice
letter to the following person and entities:
Mr. James D. Palermo
15436 North Florida Avenue
Suite 200
Tampa, Florida 33613
DK Sanford, LLC
3820 Northdale Boulevard
Suite 10013
Tampa, Florida 33624
Transit Properties LLC
624 Long Lake Drive
Oviedo, Florida 32765
Railside Loop Owner LLC
11 East 44th Street
Suite. 503
New York, New York 10017
The notice letter advised the above of the fact that the Ordinance being considered by the City
Commission would be considered as well as the date and time of the hearing of the City
Commission. Further, Mr. Lessard stated as follows:
You are further advised that Section 2-381 of the City Code
relates to continuing performance under the tax rebate program and
states as follows:
(a) Change in ownership. The business granted a rebate
shall inform the City Commission in writing within ten
days as to any changes in ownership of the business granted
a rebate and it is prohibited and unlawful to fail to do so.
Moreover, the transferee business shall continue to comply
with all rebate requirements and shall assume in writing all
of the obligations of the transferor business provided for in
the agreement required by this division. Failure of the
business granted a rebate to notify the City Commission of
any such changes in ownership is cause for revocation of
the ordinance granting the rebate, at the City Commission's
discretion.
(b) Annual filings. The ability to receive a rebate for the
period granted shall be conditioned upon the applicant's
ability to maintain the development giving rise to the award
of the rebate throughout the entire period. The applicant
shall be required to submit an annual renewal statement
and an annual report to the City Manager, or designee, on
or before March 1 of each year for which the rebate was
granted. The annual renewal statement shall certify that the
information provided in the original application has not
changed. The annual report shall provide a report on the
status of the business, evidencing satisfaction of the
business maintenance and continued performance
conditions set forth in the application. The report shall be
prepared in substantially the form approved by the City
Manager, or designee, and shall contain such information
as the City Manager, or designee, may reasonably deem
necessary for the purpose of determining continuing
performance by the business of the conditions provided for
in this division, the ordinance specifically granting the
business an (sic) rebate and the representations made in the
application.
As you know, the City was not notified of the change in property
ownership relating to the real property or the business granted the
award, which is the subject of the Agreement and Ordinance
Number 2021-4580.
Section 2-382 of the City Code provides as follows
Should any business granted a rebate pursuant to this
division fail to file the annual renewal statement and/or
annual report on or before March 1 of each year the rebate
has been granted as required by this division, fail to
continue to meet the definition of a new business or an
expansion of an existing business, fail to timely inform the
City Commission of a change of ownership, fail to file a
new application upon any change in the information
provided in the original application, fail to fulfill any other
representation made to the City Commission during the
application process, and/or fail to comply with any other
requirement provided for in this division, the City
Commission may, upon 30 days' written notice to the
respective business, adopt an ordinance revoking the rebate
or take such other action with respect to the rebate as it
deems appropriate.
This letter is was issued after it became clear that a transfer of ownership occurred without the City
being notified as required to be accomplished. As a result of that failure by the awardee, which is
cause for revocation of the ordinance granting the rebate (Ordinance No. 2021-4580), at the City
Commission's discretion.
The City's Supplemental Economic Or Tourism Development Program provided that the City
Commission, at its discretion and on a case-by-case basis, may enter into an incentive agreement
with a person, firm, or corporation providing for incentives in order to encourage and support the
development of real property within the City. Likewise, if an awardee failed to adhere to the
conditions of the award, the award becomes subject to revocation at the City Commission's
discretion
Incentives could be granted in the form of payments of amounts up to, but in no event in the
amount in excess of equal to, the sums paid in fees and taxes that have been duly paid to the City
during a specified period of time. The applicant, in this case, was granted the following conditional
and discretionary award:
(1), 70% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the first 5 years in which
the incentivized development is placed on the tax rolls of Seminole
County; and, thereafter;
(2), 50% of an amount equal to the sums paid in ad valorem taxes
that have been duly paid to the City during the second 5 years in
which the incentivized development is placed on the tax rolls of
Seminole County;
The grant was calculated on new ad valorem tax revenues.
Accordingly, based upon the foregoing, City staff recommends revocation of the award for failure
to notify the City of a change in ownership of the real property and the enactment of Ordinance
No. 2024-4805 which actions are clearly within the discretionary powers of the City Commission.
LEGAL REVIEW:
The Assistant City Attorney has reviewed this legislative matter and has provided comments as
follows.
Logan J. Opsahl, the attorney representing the current property owner, Railside Loop Owner, LLC,
asserts as follows in his letter of August 6, 2024:
The Agreement is absent of any change in ownership notice
requirement. Even if the Agreement did specifically cite to a change
in ownership notice requirement — which it does not — the Repeal
Ordinance nullified the notice requirements of Section 2-381 cited
in the Letter. As stated above, the Repeal Ordinance was adopted on
April 22, 2024. The Owner acquired title to the Property on May 22,
2024. The change in ownership of the Property occurred after the
adoption of the Repeal Ordinance. Therefore, any revocation of the
Agreement for failure to abide by terms of a repealed provision of
the Code, and which is not included in the Agreement, is unfounded
and unjust.
That statement misses the mark in several respects:
(1). The provisions of Section 4 of Ordinance No. 2024-4774, which repealed the City's
Supplemental Economic Or Tourism Development Program intentionally and specifically stated
as follows:
Savings.
The prior actions of the City of Sanford relating the approval of
applications prior to the effective date of this Ordinance, and any
and all related matters, procedures or processes, are hereby ratified
and affirmed.
Clearly, the principles and provisions (procedures or processes) that pertained to the discretionary
award of benefits were specifically intended to continue forward as they were the essence of the
transaction/deal between the City and the awarded. The legal argument presented by Mr. Opsahl
turns the concept of mutuality on its head, for the new real property owner to assert otherwise. The
argument made by legal counsel for Railside Loop Owner, LLC could equally be construed to
result in Railside Loop Owner, LLC receiving no further benefits of the award as the Program was
repealed and, being based upon legislative grace, created no vested entitlement that would continue
(2). Additionally, Section 13 of the Program agreement relates to compliance with laws and
regulations and the effect of the agreement and provides in Subsection (a) that:
In performing under this Agreement, Transit Properties LLC shall
abide by all laws, statutes, ordinances, rules, and regulations
pertaining to, or regulating the performance set forth herein
including, but not limited to, those now in effect and hereafter
adopted. Any material violation of said laws, statutes, ordinances,
rules or regulations shall constitute a material breach of this
Agreement, and shall entitle the City to terminate this Agreement
immediately upon delivery of written notice of termination to
Transit Properties LLC.
Thus, the awardee, was, and is, obligated to abide by all laws, statutes, ordinances, rules, and
regulations of the City pertaining to, or regulating the performance set forth herein including, but
not limited to, those in effect at the time the agreement was entered and those adopted by the City
at a subsequent time. If the awarded violated or violates any of the laws, statutes, ordinances, rules
or regulations of the City, that action would constitute a material breach of the agreement, and
entitled or would entitle the City to terminate the agreement.
(3). Indeed, in any event, the provisions of Section 10 of the agreement pertains, in part to the
indemnity of the City and states in Subsections (a) and (b)
(a). Transit Properties LLC is responsible for all personal injury
and property damage attributable to its acts and omissions and those
of its officers, employees, and agents.
(b). Transit Properties LLC shall indemnify, save and hold
harmless the City and all of its respective officers, agents, and
employees from and against all losses and all claims, demands,
payments, suits, actions, recoveries, and judgments of every nature
and description whatsoever including, but not limited to, claims for
property damage and claims for injury to or death of persons and by
reason of any act or omission of the Transit Properties LLC, its
officers, agents, contractors, subcontractors and employees. Further,
Transit Properties LLC shall provide necessary workers
compensation coverage and unemployment compensation for its
employees as well as all other normative or pertinent insurance
coverages.
Further, Subsection (d) of the agreement provides that the awardee shall not sue the City in
providing as follows:
(d). Transit Properties LLC agrees and covenants not to sue the
City on the basis of the matters set forth herein or associated matters
and should Transit Properties LLC file any claim or assertion to
challenge the actions of the City relative to the matters set forth
herein, or otherwise in any way associated with the grant herein, the
development of the real property referenced herein, Transit
Properties LLC shall have waived and released any and all
entitlements arising hereunder regardless of whether implemented
or not implemented or acted upon or not acted upon.
Also, the attorney for Railside Loop Owner, LLC made an argument stating that:
Therefore, following Owner's purchase of the Property on May 22,
2024, the benefit of the Agreement vested with the Owner.
That conclusion, likewise, departs from the overall context of the City Commission's action in
that:
(1). There were rights awarded, but they were contingently
granted and not vested. That is, an award was granted subject to
compliance with all conditions of that grant.
(2). The benefits came with the burdens. The subsequent owner
of the real property, upon the City being timely notified of the
transfer of ownership could have, within the discretion of the City
Commission, received a continuation of the award. Likewise,
however, the subsequent owner of the real property, as a result of
the transfer of ownership, undertook the burden of the award such
that "[flailure of the business granted a rebate to notify the City
Commission of any such changes in ownership is cause for
revocation."
(3). In terms of the asserted vesting of rights, Section 18 of the
agreement pertaining to the constitutional and statutory limitation
on authority of the City, the following is stated:
The terms and conditions of this Agreement placed upon the
City are applicable only to the extent they are within and
consistent with the constitutional and statutory limitations on
the authority of the City. Specifically, the parties acknowledge
that the City is without authority to grant or pledge a security
interest in any of the City's revenue sources or property.
It should be noted, in terms of understanding the particular parties in terms of conflicts of interest,
etc., that Railside Loop Owner, LLC is a Delaware limited liability company which is
headquartered in New York, New York. According to its registration with the Florida Department
of State, it was created on May 9, 2024. Its sole member Whitestone Journey LLC is another
Delaware limited liability company, not registered in Florida, with little public information
disclosed on the Delaware Division of Corporations' website except that the entity was apparently
created on April 15, 2024.
Also, it should be noted that the Assistant City Attorney and Mr. Lessard, discussed the positions
taken in the letter of August 6, 2024 with Rebecca Wilson who is a partner in the law firm with
which Mr. Opsahl is affiliated. Ms. Wilson was invited to present a written argument rebutting
the legal conclusions made herein, and to appear for consideration by the City Commission.
In sum, these is no legal entitlement to the continuation of the discretionary award made to the
awardee or its assigns or successors. The awardee failed to adhere to and comply with a
requirement of the award. The City Commission has the discretion to take the legislative action of
enacting Ordinance No. 2024-4805 providing for the revocation of the award. There may be legal
ramifications upon the parties to a purchase and sale agreement or relative to title insurance
policies, but those potential issues, as a matter of law, do not affect the discretionary nature of the
decision to be made by the City Commission with regard to the matter presented in this agenda
item.
RECOMMENDATION:
City staff recommends that the City Commission approve Ordinance No. 2024-4805 on first
reading, as presented.
SUGGESTED MOTION:
"I move to approve Ordinance No. 2024-4805 on first reading."
Attachments: 0).
Ordinance No. 2024-4805
(2).
Ordinance No. 2021-4580.
(3).
Ordinance No. 2024-4774.
(4).
Notice letter of July 15, 2024 from Mr. Lessard.
(5).
Letter, dated August 6, 2024, from attorney Logan J. Opsahl.
(6).
"City Of Sanford Economic Development Incentive Program Agreement With Transit
Properties LLC".
(7).
Business Impact Estimate.
RAILSIDE LOOP OWNER LLC
September 30, 2024
Via Electronic Mail
Mayor Art Woodruff Commissioner Britton
City of Sanford — City Hall City of Sanford — City Hall
300 N Park Ave 300 N Park Ave
Sanford FL, 32771 Sanford FL, 32771
Commissioner Austin Commissioner Wiggins
City of Sanford — City Hall City of Sanford — City Hall
300 N Park Ave 300 N Park Ave
Sanford FL, 32771 Sanford FL, 32771
Commissioner Mahany
City of Sanford — City Hall
300 N Park Ave
Sanford FL, 32771
RE: The Henry - 2995 Railside Loop, Sanford, FL 32771
Dear Mayor and Commissioners:
I am writing to you in order to provide context related to our request to continue the Incentive
Agreement for The Henry Apartments at 2995 Railside Loop, Sanford, FL (the "Pro e "). Our
company, Journey Capital, has offices in New York and Orlando, and has exclusively invested in
the Central Florida region; not in New York or any other market for that matter. We have spent a
significant amount of time looking for properties in the greater Orlando MSA and evaluated over
200 potential investments before deciding to move forward with the purchase of The Henry. We
selected this Property over numerous others because we were excited about the growth in Sanford
and what lies ahead for the future of the City. The Property provides great access to employers both
in Sanford and the greater Seminole County. We also were really liked that the Property was
directly across the street from the SunRail station and that residents could enjoy access to a public
trolley system that runs to Historic Downtown Sanford and its beautiful lakefront setting featuring
many unique shops, restaurants, and galleries — we strongly promote the use of public transportation
at the Property. We also like the fact that the Property provides quality housing at an affordable
price point. Our goal when we purchase a property is to elevate the tenant experience and provide
residents with a place that they are proud to call home.
A speaker at the hearing said we own billions of dollars of real estate, a statement that is factually
incorrect. We own six properties throughout the greater Orlando MSA and The Henry is one of our
larger investments at almost $75,000,000. Our investors are not nameless institutions, but rather our
lead investor is a local family based in Orlando that likes to invest in its own backyard and
continues to generously give back to the community through various charitable initiatives. We tend
to be a long-term holder of investments which is why we put a high level of thought into our
decisions. We were excited to become part of the Sanford community, and believed such a major
investment would be welcomed by a City that was promoting smart growth like this transit -oriented
project.
As soon as we acquired the Property, we got to work integrating ourselves into the community. The
majority of our tenants work in Sanford or the greater Seminole County. We reached out in various
ways to strengthen ties with the local community.
• We immediately instituted a preferred employer program, providing discounts to several
local employers (City of Sanford, Seminole County School District, Police and First
Responders, L3 Harris, Military Personnel, Deloitte, Verizon, HCA Lake Monroe Hospital,
Advent Health, & Orlando Health).
• We engage with local vendors whenever we can and utilize them for various items at the
Property, including our Food Truck Festival which all the tenants love.
• We coordinate with local home builders that are building homes in Sanford so that future
home purchasers can move into Sanford immediately on a flexible lease at our Property
while they wait for their home to be completed.
• We are working with the adjacent landowner to allow them access to parts of the Property
so that they can resolve their drainage and sewer issues — purely an accommodation to them
and what we felt was the neighborly thing to do.
• We have a strong relationship with L3 Harris and permit them to run a bus service from the
Property to their commercial pilot training program at the Sanford Airport, to accommodate
their employees and students that reside at The Henry.
We really enjoyed diving in immediately and becoming part of the fabric of the community. Our
efforts were well received by all those with whom we interacted. We believed that our actions and
our major investment would be welcomed by the City.
The tax abatement that the City of Sanford granted was a material consideration for proceeding with
this investment in The Henry. The City was able to facilitate the development of an underutilized
parcel adjacent to public transit, activate a street -facing property along a major road that was long
dormant, materially increase the tax assessment for that parcel and provide quality housing for its
residents — these are all significant benefits which the City bargained for and continues to receive.
In return for providing these items, the property owner for The Henry received a partial tax
abatement for a finite period of time. Although the City has and continues to receive the benefits for
which it bargained for, it seeks to take away the only benefit which it granted to the owner of The
Henry after our decision to acquire the Property and make a material investment in the City of
Sanford. This does not seem equitable.
There was discussion at the Hearing that we attempted to keep the transaction quiet; I can assure
you that was not the case. We had regular communication with several members of City staff prior
to, during and after the sale of the Property.
• Almost immediately upon our purchase we informed the City of our ownership in order to
have utilities transferred to us.
• We coordinated with various individuals at the City regarding the transfer of certain permits.
• A code enforcement officer showed up on the day of closing and we have been working
diligently with him to address an issue which developed during the Seller's ownership.
• For weeks prior to and after the closing, we have been working with our neighbor, Seminole
County and your staff to help provide access to our neighbor to alleviate their drainage and
sewer issues — we are a party to these documents.
I do not believe any of these can be construed as the actions of a party that was trying to transact
quietly.
As I mentioned previously, the tax abatement was a material consideration of our decision to make
this significant investment in Sanford. We anticipated a long and mutually beneficial partnership
with the City, and we still hope that is possible. I am happy to meet and discuss further at your
convenience and to provide you a personal tour of the Property so you can see what a great addition
Ns to the community.
lly,
Peter Oald'to�u
917-848-6529